India's IT stocks head for worst day in four months after two-day rally

Mphasis

03/06/2026 07:48

** IT stocks .NIFTYIT tumble 5.7%; set for biggest daily pct drop since February 4
** Decline comes after overnight selloff in U.S. software stocks, which had rallied recently on hopes AI spending would boost demand for software firms; Nifty IT index gained 7% in last two sessions
** IT stocks derive a significant portion of revenue from the U.S.
** Heavyweight Tata Consultancy Services TCS.NS slides 8.4%, erasing Tuesday's 6.5% gains
** Infosys INFY.NS and Wipro WIPR.NS slide 4% and 3%, respectively
** Some investors remain cautious on long-term benefits of AI for IT sector
** "We expect new opportunities such as legacy modernization to increase, but do not expect them to compensate for the deflation enough. Perhaps high custom software build versus SaaS adoption can bridge the gap, but so far firms have not been inclined toward that path," says Kotak Institutional Equities

 (Reporting by Vivek Kumar M)
 ((VivekKumar.M@thomsonreuters.com;))