India's IT index falls to three-year low on weak earnings outlook, demand worries

Infosys

12/05/2026 06:40

May 12 (Reuters) - India's Nifty IT index .NIFTYIT tumbled 3.6% on Tuesday to its lowest level since May 2023, as a weak earnings outlook and fears of slowing demand for traditional IT services rattled investors.

Analysts at HSBC said in a Tuesday note that fourth-quarter earnings and fiscal 2027 outlooks from India's top-tier IT firms largely missed expectations, adding that strong global artificial intelligence spending could be "crowding out" spending on traditional IT services.

HSBC's warning comes a day after OpenAI said it is launching a new company backed by more than $4 billion to help organisations build and deploy AI.

In February, global IT stocks saw a rout after Anthropic launched new tools that heightened concerns about AI-driven disruption in the data and professional services industry.

On Tuesday, shares of Indian IT companies including Tata Consultancy Services TCS.NS , InfosysINFY.NS , HCL Technologies HCLT.NS and Wipro WIPR.NS fell between 2.5% and 4%.

 (Reporting by Surbhi Misra in Bengaluru; Editing by Ronojoy Mazumdar)

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