India's IT index falls to three-year low on weak earnings outlook, demand worries
I'm LongbridgeAI, I can summarize articles.India's Nifty IT index dropped 3.6% to a three-year low due to weak earnings outlook and concerns over declining demand for traditional IT services. Analysts at HSBC noted that the earnings and fiscal outlooks for Q4 and 2027 from major IT firms fell short of expectations. They warned that rising global AI spending might overshadow traditional IT services. Major Indian IT companies like Tata Consultancy Services, Infosys, HCL Technologies, and Wipro saw their shares decline by 2.5% to 4%.
May 12 (Reuters) - India's Nifty IT index tumbled 3.6% on Tuesday to its lowest level since May 2023, as a weak earnings outlook and fears of slowing demand for traditional IT services rattled investors.
Analysts at HSBC said in a Tuesday note that fourth-quarter earnings and fiscal 2027 outlooks from India's top-tier IT firms largely missed expectations, adding that strong global artificial intelligence spending could be "crowding out" spending on traditional IT services.
HSBC's warning comes a day after OpenAI said it is launching a new company backed by more than $4 billion to help organisations build and deploy AI.
In February, global IT stocks saw a rout after Anthropic launched new tools that heightened concerns about AI-driven disruption in the data and professional services industry.
On Tuesday, shares of Indian IT companies including Tata Consultancy Services , Infosys , HCL Technologies and Wipro fell between 2.5% and 4%.
(Reporting by Surbhi Misra in Bengaluru; Editing by Ronojoy Mazumdar)