TCS, Infosys, HCLTech, Wipro Decline Up To 3.5%: Why Are Indian IT Stocks Falling Today?

Indian IT stocks came under sharp selling pressure on Friday, with the Nifty IT index dropping more than 3% as investors rotated out of domestic software exporters and back into global artificial intelligence (AI) and semiconductor stocks following a strong rebound on Wall Street.

Heavyweight IT names led the decline. Infosys fell 3.54%, Persistent Systems slipped 3.54%, Tata Consultancy Services (TCS) declined 3.45%, HCLTech dropped 2.27%, Wipro lost 2.46%, Tech Mahindra fell 1.59%, Mphasis slipped 2.48%, Hexaware Technologies declined 2.39%, LTTS fell 1.94%, Tata Elxsi lost 1.51% and KPIT Technologies dropped 1.66%. The Nifty IT index was down over 3% in early trade.

Why are Indian IT stocks falling today?

The sharp correction comes amid a noticeable reversal in the recent trend between

Indian IT stocks and global AI- and chip-related companies.

Over the past several trading sessions, Indian IT shares had outperformed as global AI and semiconductor stocks witnessed profit booking amid concerns over elevated valuations and heavy AI-related capital expenditure. As money flowed out of global technology names, investors shifted towards Indian IT companies, helping the sector rally.

In July, the Nifty IT index staged a sharp comeback, rising nearly 19 per cent to record its biggest monthly gain in six years as investors rotated from the crowded AI trade into relatively cheaper technology stocks.

The Nifty IT index hit a 52-week low of 25,699 on July 1, 2026, before rebounding more than 21 percent from those levels. The recovery was broad-based across the sector after the index had fallen around 31 percent in the first half of 2026.

However, Friday saw that trend reverse. Global technology stocks staged a powerful comeback after better-than-expected earnings and upbeat guidance from Microsoft and Amazon eased concerns over AI spending. The positive earnings boosted confidence that demand for AI infrastructure remains strong, triggering a broad rally in semiconductor and AI-linked companies.

The renewed appetite for global AI and chip stocks prompted investors to book profits in Indian IT counters, leading to a broad-based selloff across the sector.

Global markets rebound

Asian markets rallied sharply after Wall Street’s overnight gains. South Korea’s Kospi surged 14% in early trade, marking a record rebound after heavy losses earlier this week. Japan’s Nikkei jumped 5%, while MSCI’s broad Asia-Pacific index outside Japan rose 3%.

US markets also pointed to further gains, with Nasdaq futures rising 0.87% and S&P 500 futures adding 0.29%. In Europe, EURO STOXX 50 futures advanced 0.57%, while FTSE and DAX futures gained around 0.4% each.

The strong global risk-on sentiment, particularly in AI and semiconductor stocks, has effectively triggered an inverse reaction in Indian IT shares, which had benefited during the recent weakness in global technology names.

As a result, investors are witnessing a sharp sectoral rotation, with funds moving back into global AI beneficiaries while Indian IT stocks face profit booking after their recent outperformance.