On Wednesday, the Indian IT sector experienced a significant drop, with major companies like Infosys and TCS suffering substantial losses due to worries about Anthropic's latest products. Infosys, the second-largest IT company in India, fell by more than 8 percent, marking its most significant decline in over two and a half years.
At 12:22 pm, Infosys shares dropped by 8.23% to Rs 1518.80 on the BSE, a significant decline from the previous close of Rs 1,654.95. This represents the largest single-day decrease for Infosys since May 21, 2023, when the stock fell by 9.4% to an intraday low of Rs 1,304.24 on the BSE, before closing 8.18% lower at Rs 1,322.94 compared to its May 20, 2023, closing price of Rs 1,440.72.
This resulted in a substantial loss of investor wealth, with Infosys's market capitalisation dropping by more than Rs 54,000 crore, reducing its total market cap to Rs 6.31 lakh crore, according to BSE data.
Mayuresh Joshi, the Head of Equity Research at William O Neil India, mentioned that it seems Anthropic has likely created a new AI automation tool late last night. There is market apprehension that this development might impact the primary operations of companies in the data and information services sector.
Shares of other major IT companies also fell sharply. TCS decreased by 6.50 percent to Rs 3,014 per share, while Tech Mahindra declined by 5.79 percent, trading at Rs 1,616.35.
The BSE IT index fell by 6.21 percent to 34,844.43.
The impact was immediately evident in the US markets, as the Nasdaq index, which is dominated by technology stocks, fell by 1.43 percent, ending the day at 23,255.19.
Joshi stated, 'I think data processing companies, which constitute a large part of the Indian IT sector, will be affected. However, it's not limited to IT stocks. Consider the recent decline in US stocks. Shares of Atlassian, ServiceNow, Salesforce, Gartner, and Accenture all saw substantial drops.'
Anthropic has introduced plug-ins for its Claude Cowork agent, aiming to automate tasks in areas such as legal, sales, marketing, and data analysis.
These plug-ins are said to be highly effective in customizing Anthropic's Claude for particular roles like sales, legal, and financial analysis, despite being applicable to a range of use cases.
VK Vijayakumar, the Chief Investment Strategist at Geojit Investments Limited, observed that the surge driven by the US-India trade agreement will encounter challenges in maintaining its momentum.
"Vijayakumar mentioned that the decline in the US IT sector yesterday is likely to impact the Indian IT index as well, limiting the upward movement in the Indian market. He noted that with valuations still elevated, there is no fundamental backing for a prolonged rally.
Disclaimer: The Bridge Chronicle provides stock market news for informational purposes only and should not be construed as investment advice. Readers are encouraged to consult with a qualified financial advisor before making any investment decisions.