Indian IT shares tank! Shares of Indian IT companies dropped by as much as 6% on Tuesday after fresh artificial intelligence announcements from global chipmaker Nvidia, which reignited concerns about AI-driven disruption in the technology services sector. Investor caution also remained high ahead of the US Federal Reserve’s FOMC meeting scheduled for later this week.Indian IT stocks had already experienced a notable drop earlier this year after Anthropic introduced plug-ins for its Claude Cowork agent, capable of automating tasks across departments such as legal, sales, marketing and data analysis. Some analysts had then warned that IT services firms may eventually need to reduce their workforce as more affordable and efficient AI tools begin to replace certain functions.

What Nvidia has announced

At its annual GTC developer conference in San Jose, California, Nvidia said the potential revenue opportunity for its artificial intelligence chips could reach at least $1 trillion by 2027. During the event, CEO Jensen Huang introduced a new central processor along with an AI system built using technology from Groq, a chip startup whose technology Nvidia licensed for $17 billion in December.“The inference inflection has arrived,” Huang said. “And demand just keeps on going up,” he added.Wall Street closed higher after Nvidia’s announcements. The S&P 500 rose 1% to finish at 6,699, marking its strongest single-day gain in more than a month. The tech-heavy Nasdaq advanced 1.22%, while the Dow Jones Industrial Average climbed 0.83%.Investors are also closely watching the outcome of the US Federal Reserve’s FOMC meeting scheduled later this week. The decision is expected to influence sentiment toward IT stocks, as Indian technology companies generate a large share of their revenue from the US market.

Indian IT shares take a hit

Shares of Coforge fell about 6%, while major companies such as Wipro, Infosys, Mphasis, LTI Mindtree and Persistent Systems each declined by more than 2%. Several of these stocks touched fresh 52-week lows during the session, according to an ET report.Earlier, brokerage Nuvama said in a note that the sharp correction in IT stocks since the start of the year, triggered by fears of AI-driven disruption following successive AI tool launches by Anthropic, has made valuations in the sector more appealing.“Reports of my death are greatly exaggerated,” Nuvama said, quoting Mark Twain to describe what it believes reflects the current situation in the IT industry.“Given the advent and adoption of Gen AI, obituaries of the Indian IT services industry are being written all around. The concerns have been amplified by the sharp stock reactions, first with global SaaS and now with IT services companies,” the note said according to ET.Nuvama added that it does not view generative AI as an existential threat to the sector. The brokerage said companies will continue to require system integrators capable of customising plug-and-play enterprise software inputs and outputs to meet specific organisational needs.(Disclaimer: Recommendations and views on the stock market, other asset classes or personal finance management tips given by experts are their own. These opinions do not represent the views of The Times of India)(Disclaimer: Recommendations and views on the stock market, other asset classes or personal finance management tips given by experts are their own. These opinions do not represent the views of The Times of India)

Sensex Today: Indian benchmark indices erased gains shortly after opening as realty and bank stocks weighed. As of 9:17 AM, the Nifty50 was trading 0.14 per cent or 27.90 points down at 23,380.90, and the Sensex was trading 0.11 per cent or 4.68 points down at 75,498.17.

Global cues

Markets across the Asia-Pacific region advanced, mirroring overnight gains on Wall Street, even as crude oil prices showed volatility after easing from earlier highs. Japan’s Nikkei 225 and South Korea’s Kospi were up 0.30% and 2.53%, respectively.

On Wall Street, US equities closed higher, with the S&P 500 rising 1.01%, the Dow Jones gaining 0.83%, and the Nasdaq Composite advancing 1.22%.

In the commodities market, Brent crude settled 2.84% lower at $100.21 per barrel in the previous session after US President Donald Trump urged allies to ensure stable energy supplies from the Strait of Hormuz. Sentiment was also supported by expectations that more countries may release oil from strategic reserves, according to Bloomberg.

However, in the Asian session, Brent crude rebounded nearly 2.9% to $103.06 per barrel, as renewed concerns over potential supply disruptions in the Strait of Hormuz resurfaced.

Meanwhile, gold and silver futures edged higher, gaining 0.41% and 0.53%, respectively.