Sensex falls 559 pts on IT selloff

MUMBAI: Strong selling in IT stocks, led by sector leaders Infosys and TCS, pulled sensex down by 559 points on Thursday to close at 83,675 points, BSE data showed. Nearly 400 points of the index’s fall was contributed by the slide in these two stocks, mainly on the back of questions about the viability of their business model in the age of AI.

The day’s selling left investors poorer by about Rs 2.5 lakh crore with BSE’s market capitalisation now at Rs 474.5 lakh crore. According to Vinod Nair of Geojit Investments, AI is creating a structural shift in the Indian IT services sector by reducing timelines and automating tasks, putting pressure on the traditional headcount-based outsourcing model.

At Thursday’s close, Infosys was down 5.8%, TCS was down 5.4% while Tech Mahindra was down 6%. The strong selling in the IT space left BSE’s IT index close 5.3% down. In the last one month, the index has lost 12.3%. The sharp slide in TCS also pulled its market capitalisation below the Rs 10-lakh-crore mark for first time since Nov 2020.