By Admin 
Tech Share Falls: There was huge pressure on IT stocks in the domestic stock market on Tuesday and this fall was not limited to just profit-booking, but deep concerns related to AI were working behind it. The market may have had a strong start, but as soon as it opened, there was strong selling in IT stocks. TCS was down around 7%, Infosys was down around 8%, while HCL Tech, Tech Mahindra and Wipro also fell sharply. There was a decline of about Rs 2 lakh crore in the market value, which means investors have suffered a loss of this much. The main reason for this decline was the negative news from America.
Shock from America: Impact of AI
There was a sharp decline in tech stocks in America when artificial intelligence company Anthropic announced the launch of a new advanced AI tool. This tool can: Perform routine tasks like document review, data handling, analytical and processing tasks very efficiently.
These are the tasks for which till now big global companies have been dependent on Indian IT service providers. In such a situation, investors started fearing that AI may reduce the demand for these traditional IT services in the future.
Decline in ADR increases concern
The first effect of this concern was visible in ADRs (American Depository Receipts) listed in the American market. ADRs of Infosys and Wipro fell sharply overnight. ADRs are actually American representations of shares of foreign companies. When these fall, it directly impacts the Indian market the next day.
The result was that as soon as the Indian market opened, investor sentiment was already weak and heavy selling was seen in IT shares.
Is it just nervousness?
The decline seen in the market at present is based more on future fears and not on the current fundamentals of the companies. However, what is clear is this: investors have become more cautious about the increasing influence of AI, the business models of IT companies and their long-term growth.
In the coming days, statements coming from IT companies on AI strategy, revenue guidance and client demand will decide the direction of the market.
Also read: ‘Come backā¦ whatever happened, happened,’ Zomato founder Deependra Goyal’s emotional post about former employees.
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