On Tuesday, February 24, 2026, the Nifty IT index witnessed a brutal sell-off, crashing over 5% to hit a fresh 52-week low of 30,368.80. This “IT carnage” wiped out approximately ₹5 lakh crore in investor wealth in a single session, dragging the broader Sensex and Nifty indices down with it.
The crash was fueled by a “perfect storm” of technological disruption fears and geopolitical uncertainty.
The “Claude Code” Shockwave
The primary catalyst for the meltdown was an announcement from the AI firm Anthropic regarding its new tool, Claude Code.
- Modernizing COBOL: Anthropic claimed the tool could modernize legacy COBOL systems—the backbone of global banking and airline infrastructure—significantly faster and cheaper than human teams.
- The IBM Contagion: This news caused IBM shares to plummet 13% in the US overnight (its steepest drop in 25 years), as IBM earns billions from maintaining these legacy systems.
- Impact on India: Investors fear that Indian IT giants (TCS, Infosys, Wipro), which rely heavily on manual legacy system maintenance and code migration, could see their primary revenue streams automated away.
Market Performance (Feb 24, 2026)
The selling was broad-based, with all 10 constituents of the Nifty IT index trading in the deep red.
| Stock | intraday Decline | Milestone |
| Persistent Systems | -7.2% | Top loser in the IT pack |
| Tech Mahindra | -5.7% | Major drag on the Nifty 50 |
| HCL Technologies | -5.5% | Hit fresh 52-week low |
| Infosys | -4.1% | Downgraded to ‘Hold’ by Jefferies |
| TCS | -3.8% | Shifted to ‘Underperform’ by Jefferies |
Additional Triggers
- US Tariff Threats: Fresh remarks from President Donald Trump regarding global tariffs added to the risk-off sentiment, as Indian IT firms derive the majority of their revenue from US and European clients.
- Brokerage Downgrades: Jefferies downgraded several IT heavyweights, warning that AI could structurally shrink “managed services” revenue. They cautioned that in a worst-case scenario, sector valuations could drop another 30–65%.
- Deflationary Risk: HSBC Global Research projected a 14–16% gross deflationary risk to overall IT sector revenues over the next few years due to AI efficiency gains.
- ADR Sell-off: The American Depository Receipts (ADRs) of Infosys and Wipro fell sharply in the US on Monday night, signaling a weak mood among foreign institutional investors (FIIs) that spilled over into the Indian market at the opening bell.
The “Death Cross” Technical Signal
Market analysts noted that the Nifty IT index has now entered a clear bearish phase. Technically, the index witnessed a “Death Cross” (where the short-term moving average crosses below the long-term average) and breached the critical 61.8% Fibonacci retracement level. Analysts suggest the “buy on dips” strategy has now shifted to “sell on rise.”
