IT stocks face sharp correction; Tech Mahindra, HCL Tech drop over 4 pc

New Delhi, May 12 (PTI) IT stocks were hit hard on Tuesday, with Tech Mahindra and HCL Tech dropping over 4 per cent, amid concerns over AI-driven pricing pressure and the overall bearish trend in equities.

Tech Mahindra slumped 4.44 per cent, HCL Tech tanked 4.11 per cent, Tata Consultancy Services dropped 3.84 per cent, Wipro fell by 3.59 per cent, Infosys declined 3.09 per cent and Hexaware Tech dipped 1.42 per cent on the BSE.

The BSE IT index dropped 3.67 per cent.

The 30-share BSE Sensex tanked 1,456.04 points, or 1.92 per cent, to settle at 74,559.24. The 50-share NSE Nifty dropped 436.30 points, or 1.83 per cent, to end at 23,379.55.

“The decline was broad-based, led by IT and realty stocks. IT stocks underperformed as concerns grew around

AI-driven pricing pressure and potential disruption following recent enterprise adoption initiatives by OpenAI,” Vinod Nair, Head of Research, Geojit Investments Limited, said.

Shashwat Singh, Fundamental Analyst – Bajaj Broking, said, IT stocks faced a sharp correction today following OpenAI’s announcement of the Deployment Company, a new business unit designed to provide direct, hands-on enterprise AI implementation.

“The market reaction was particularly severe for India’s service-based IT giants, as investors fear these companies may be sidelined by AI companies that can now automate and deploy their own technology more efficiently. This concern over the long-term viability of the offshore service model has been compounded by rising geopolitical tensions, which have dampened global risk appetite and triggered a broad-based sell-off,” Singh added. PTI SUM HVA