The rally in information technology stocks came to a halt on Wednesday as the sector witnessed broad-based selling. The BSE IT Index declined 1,318.77 points, or 4.38%, to 28,788.1, reflecting sharp weakness across major technology stocks.
Indian equity markets saw significant selling pressure in the IT sector during Wednesday's session, with Tata Consultancy Services (TCS), the flagship company of the Tata Group and the country's largest IT services firm, emerging as one of the biggest losers. The stock fell more than 7%, contributing to the decline in the broader IT index.
The BSE IT Index dropped more than 4% during morning trade, falling by around 1,300 points to near the 28,800 level. The decline followed a recent rally in IT stocks that had been supported by expectations of growth linked to artificial intelligence (AI).
Shares of Tata Consultancy Services declined approximately 7.27% and were seen trading near ₹2,270. Market experts attributed the decline to profit booking following the recent rally, volatility in the global IT sector, and pressure arising from currency movements.
Selling was not limited to TCS. Other major IT companies, including L&T Technology Services, Persistent Systems, Tech Mahindra, HCL Technologies, and Infosys, also registered declines ranging from 3% to 7%.
According to analysts, investors began booking profits after the sector's recent gains. The IT sector had attracted increased investor interest in recent sessions amid optimism surrounding AI-driven growth opportunities. The expansion of AI technologies and expectations of global demand had supported a rally in IT stocks, but Wednesday's session saw a reversal of that trend as investors sold shares following the recent gains.
Experts also indicated that movements in the Indian rupee played a role in the sector's weakness. While a weaker rupee against the US dollar can benefit IT companies, heightened currency volatility has remained a factor influencing investor sentiment.
