New Delhi, Feb 12 (NationPress) The technology sector experienced a wave of panic selling on Thursday, causing the Nifty IT index to plunge by 5.51 percent to its lowest mark in four months. Investors were rattled by concerns regarding the disruption caused by AI and diminishing expectations for imminent cuts in U.S. interest rates.

The overall market capitalization of Nifty IT constituents fell dramatically to Rs 27,32,579 crore, marking a loss of approximately Rs 1.6 lakh crore.

Major software exporters saw their shares decline by over 5.5 percent, with Tata Consultancy Services dropping 5.48 percent to reach a 52-week low of Rs 2,750 on the NSE. Infosys fell by 5.48 percent, Tech Mahindra saw a significant drop of 6.40 percent, while HCLTech, Mphasis, and Wipro each experienced losses ranging from 4.5 to 5 percent, pulling the entire IT index further into negative territory.

Market analysts indicated that this selloff stemmed from renewed concerns that advanced AI technologies could potentially replace traditional services that are crucial for generating significant revenue streams for Indian IT companies. Earlier this month, Anthropic unveiled its product, “Claude Cowork,” an AI assistant equipped with an advanced automation layer aimed at managing comprehensive business workflows.

This system included enterprise automation plugins capable of executing multi-step workflows that have traditionally supported software-services revenues.

International brokerage Jefferies referred to the product launch and the resulting decline in NASDAQ as “SaaSpocalypse,” suggesting that AI is poised to supplant these conventional software companies. Some strategists have cautioned that revenue could experience a deflation of up to 40 percent if agentic AI displaces traditional services already under margin pressure.

In addition to the selloff, stronger-than-expected U.S. jobs data has dampened hopes for prompt Federal Reserve rate reductions. U.S. payrolls rose by 130,000 last month, with the unemployment rate declining to 4.3 percent, figures that market observers believe raise the likelihood of a sustained period of elevated global rates, adversely affecting technology stocks sensitive to growth.

Brokerage Motilal Oswal cautioned that “AI will render much of legacy software and testing obsolete,” drawing comparisons to how hyperscalers have disrupted infrastructure management services.

The upgraded system from Anthropic introduced various automation plugins capable of executing full operational processes, rather than merely assisting employees within existing software tools. Many functions that once necessitated separate software subscriptions can now be integrated into this platform, thereby diminishing reliance on traditional SaaS offerings.