Analysts blamed Anthropic’s new workplace automation plugins, unexpectedly strong US jobs data, and stretched equity valuations. Moreover, foreign funds trimmed positions, amplifying volatility across related stocks and derivative instruments. Meanwhile, technology stocks worldwide echoed the slide, adding correlation risk. This report unpacks the sell-off timeline, macro triggers, company-level pain, and future strategic options.

Furthermore, it contrasts bearish and bullish viewpoints to help executives navigate shifting revenue models. Professionals seeking structured guidance can upskill through the AI Project Manager certification. The following sections deliver actionable insights, concise data, and forward-looking analysis.

Rapid February Slide Unfolds

Selling pressure began on 4 February after Anthropic unveiled enterprise plugins for its Claude assistant. Consequently, the Nifty IT index opened with a gap and never recovered intraday. Subsequently, sellers hammered heavyweights such as TCS, Infosys, and Wipro, dragging sentiment across Asia. By 5 February, cumulative losses approached 6%, already signalling an acute Index Slump for technology names.

The rout intensified on 12 February when the gauge plunged 5.51% to about 33,160. Moreover, intra-session lows were the worst recorded since April 2025. Volume spiked 40% above the 20-day average, underscoring panic and algorithmic exits. The wider market mirrored the slide, though losses were less dramatic.

Weekly data showed an 8.2% decline, the sharpest in ten months. Therefore, roughly US$50 billion of sector capitalisation vanished before tentative bargain hunting emerged. These numbers confirm the severity. However, understanding the underlying fears is essential before judging durability. Traders witnessed record selling volumes and deep percentage cuts in mere days. Meanwhile, new artificial intelligence worries kept pressure unrelenting, a theme explored next.

AI Disruption Concerns Mount

Anthropic’s Claude Opus update showcased rapid code generation, automated testing, and summarisation abilities. Consequently, investors extrapolated margin erosion for labour-intensive outsourcing models. Jefferies estimated 40–70% of application-services revenue faces automation risk within five years. In contrast, JP Morgan argued enterprise integration complexity will temper the pace of displacement.

Moreover, clients may redirect budgets toward AI products rather than traditional headcount projects. Therefore, the Index Slump reflected revised top-line growth assumptions across the sector. Nevertheless, several executives called the reaction excessive, noting that AI deployment still requires change management. Strategists noted that India could still supply integration expertise even if coding becomes automated.

Key disruption concerns cited by brokers include:

• Automation of testing and maintenance contracts
• Shift from billable hours to outcome pricing
• Lower renewal rates for legacy support deals
• Talent reskilling costs pressuring margins

These fears ignited valuation derating. Consequently, macro factors added another headwind, examined in the following section.

Macro Headwinds Deepen Pressure

Strong January US payroll data slashed odds of early Federal Reserve easing. Therefore, global risk appetite retreated, especially in growth oriented stocks. Foreign institutional sales topped ₹7,800 crore during the worst week, adding currency drag. Meanwhile, dollar strength hurts exporters’ pricing negotiations, reinforcing revenue uncertainty.

Higher bond yields also widened the relative earnings yield gap, prompting algorithmic reallocations into defensives. Consequently, banking indices outperformed while the technology Index Slump accelerated. Volatility futures for the sector spiked 22%, reflecting hedging demand. Equity market signals flagged risk-off positioning among global allocators.

Macro tightening magnified sentiment damage already sparked by AI narratives. Additionally, the Index Slump deepened when bond yields climbed. However, examining individual firms reveals further texture, which follows immediately.

Company Impact Snapshot 2026

TCS breached its ₹10 lakh crore capitalisation threshold, touching a fresh 52-week low. Infosys declined 11% across three days, despite later announcing collaboration with Anthropic. Wipro and HCLTech each surrendered double-digit percentages, reflecting broad based Index Slump contagion.

Moreover, mid-tier names like Mphasis and Coforge posted heavier percentage losses than many large peers. Persistent, being product heavy, experienced relatively milder selling but still hit quarterly lows. Consequently, index breadth deteriorated, with only two constituents closing positive during the worst session.

Headline one-day losses included:

• TCS: −4.9% on 12 February
• Infosys: −6.3% on same day
• Wipro: −7.1% intraday
• Nifty IT: −5.51% close

These figures illustrate uniform selling irrespective of size or strategy. In contrast, analysts’ interpretations diverge, as the next section demonstrates.

Analyst Opinions Diverge Sharply

Jefferies reiterated an Underperform stance, citing erosion of application-services volumes and slower cyclical rebound. Meanwhile, the brokerage trimmed FY27 revenue estimates by two percentage points for several stocks. Consequently, its target multiples contracted to 18 times forward earnings from 22. However, the Index Slump has already forced several houses to recalibrate valuation models.

Conversely, Macquarie upgraded the sector to Neutral, framing the dramatic Index Slump as capitulation. The house expects clarity when fourth-quarter results outline AI monetisation roadmaps. Moreover, JP Morgan urged selective buying, stressing that enterprise transformation still demands human oversight.

Therefore, disagreement remains wide, reflecting uncertainty rather than consensus doom. Nevertheless, leadership teams are already recalibrating strategy; their options appear in the following analysis.

Strategies For Future Resilience

Several companies announced accelerated upskilling programs focused on prompt engineering and model governance. Infosys is rolling out client co-creation labs to build domain-specific AI agents. Consequently, management hopes to convert disruption into billable innovation deals.

TCS signalled movement toward outcome pricing tied to productivity rather than headcount. Moreover, HCLTech is integrating Anthropic APIs into its automation platform to boost software testing speeds. Therefore, leadership aims to protect margins even if the current Index Slump persists.

Experts recommend three priority actions:

• Invest aggressively in proprietary generative models
• Shift to consulting-led engagement frameworks
• Reskill 30% of workforce within 24 months

Professionals can validate their transformation skills through the AI Project Manager certification. India must also modernise curricula to feed future demand. Collectively, these levers may reverse sentiment over time. Consequently, the concluding section synthesises the broader outlook.

Conclusion And Next Steps

The February Index Slump exposed how quickly sentiment can swing when technology and macro anxieties coincide. Yet, India retains deep engineering talent, global delivery footprints, and longstanding client relationships despite rising volatility. Moreover, early partnerships with AI leaders could expand high-margin service lines. Nevertheless, boards must accelerate reskilling, embrace outcome contracts, and communicate progress transparently.

Therefore, investors should track management commentary, revenue mix shifts, and further policy signals. Global tech stocks will watch Indian execution closely. Professionals keen to lead such transitions can enrol in the AI Project Manager certification today. Market sentiment could stabilise once earnings guidance turns clearer. A proactive talent base, renewed strategies, and supportive policy may transform the present crisis into lasting opportunity.