Nifty IT drops 0.79% as Tech Mahindra shares decline nearly 3%
India’s IT index resumed its decline amid weak demand, uncertainty over AI’s impact, macroeconomic risks and continued capital outflows.
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what happened
New Delhi, October 12. According to HT Digital Content Services, which published the report with permission from MINT, the Nifty IT index fell 0.79% on Monday after gaining 3% in the previous session. Tech Mahindra declined 2.85%, TCS lost 1.44% and Oracle Financial Services Software fell 1.43%. LTM dropped 1.26%, Coforge 1.14%, Wipro 0.47% and Infosys 0.33%. HCL Technologies rose 0.52% and Persistent Systems gained 0.29%; they were the only two of the index’s 10 components to finish higher.
The sector has remained under pressure because of macroeconomic challenges, US regulatory headwinds, AI-led disruption and foreign capital outflows. Over five years, Nifty IT has returned negative 16%, compared with a 22% rise in the Nifty 50. Year to date, the IT group is down 25% versus a 14% decline in the Nifty. Wipro, Infosys, TCS and HCL Technologies have fallen 39.5%, 37%, 34% and 25%, respectively. Tech Mahindra is down 8.50% and Persistent Systems 8%, while Oracle Financial Services Software has risen 35% and Coforge 11.5%.
Pankaj Pandey, head of research at ICICI Securities, said uncertainty linked to macroeconomic conditions and AI means the IT sector is not yet suitable for broad buying. Sumit Pokharna, SVP of Fundamental Research at Kotak Neo, said valuations had corrected substantially, but pointed to weak revenue visibility, slower-than-expected order-book growth, geopolitical uncertainty, inflation and higher US bond yields. He added that more technology budgets are being allocated to AI, delaying client decisions and shifting contracts from manpower or hourly billing toward deliverables. Pokharna favors stock-specific consideration of Coforge and Persistent Systems, while saying the sector as a whole is not a clear buy.
why it matters
The decline highlights how changing technology budgets and uncertainty over AI adoption are affecting India’s IT services companies. Continued institutional selling is adding to pressure on the sector’s shares.
instruments
sources
- Tech Mahindra, TCS, Oracle shares fall up to 3% today - Is it the right time to buy IT stocks? — Newsmetry API, 12 October 2026 at 15:29 UTC
prepared by the newsmetry newsroom with ai assistance from the sources listed below. not investment advice.
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