Last Updated:February 13, 2026, 10:28 IST

The Nifty IT index plunges nearly 5% in early trade on February 13, with heavyweights such as Infosys, Tata Consultancy Services, Wipro and HCLTech leading the fall.

Know Why IT Are Stocks Falling.

Why Are IT Stocks Falling? Indian IT stocks extended their sharp decline for a second straight session on Friday, tracking global weakness in technology shares and mounting concerns that rapid advances in artificial intelligence could disrupt the traditional business models of software exporters.

The Nifty IT index plunged nearly 5% in early trade on February 13, with heavyweights such as Infosys, Tata Consultancy Services, Wipro and HCLTech leading the fall. The sell-off mirrored weakness in US technology stocks overnight, where Apple dropped nearly 5%, Meta fell 2.82%, Nvidia declined 1.61% and Tesla slipped 2.69%. American Depository Receipts of Indian IT firms, including Infosys and Wipro, also slid as much as 9%, signalling negative sentiment ahead of domestic trading.

On the day, Infosys tumbled 6.2%, TCS fell 4.84% to a fresh 52-week low of ₹2,620, HCLTech declined 4.85% and Wipro lost 3.7%. Mid-cap names also saw broad-based selling: Persistent Systems dropped 3%, Coforge fell 5.32%, KPIT Technologies slumped nearly 8%, and Tech Mahindra declined 3.55%.

Why Are IT Stocks Falling?

Market participants say the sector is facing a rare combination of structural disruption and macroeconomic headwinds.

Agentic AI fears: The launch of advanced artificial intelligence systems capable of executing entire workflows — not just assisting coders — has intensified concerns about “seat compression”, or reduced staffing needs. Since Indian IT firms traditionally earn revenue based on billing hours and manpower, automation threatens the very foundation of their pricing model. Recently, Anthropic’s Claud Cowork sent shockwaves to the global IT industry. A new tool from AI company Algorhythm Holdings has also made trucking companies the latest victim of the market’s AI jitters.

Billing model transition: According to analysts, clients might move from time-and-material contracts to outcome-based pricing. While this could improve efficiency in the long term, markets worry that the transition phase may temporarily dent revenues as tech companies recalibrate pricing structures.

Valuation correction: After a strong rally in late 2025 driven by AI optimism, many IT stocks were trading at elevated valuations. The current risk-off environment is triggering profit-booking, especially in companies lacking a clear near-term AI monetisation roadmap.

Global tech layoffs: More than 80,000 tech employees were reportedly laid off globally in the first 40 days of 2026, including at large firms such as Amazon and Salesforce. Investors see this not as routine cost-cutting but as a structural shift toward automation and AI-driven efficiency.

What Analysts Are Saying

Strategists at JPMorgan said in a recent note that the sharp correction in software stocks may be excessive and driven more by fear than by actual deterioration in business fundamentals. According to the brokerage, markets appear to be pricing in AI-led disruption at unrealistic levels, which could create room for a rebound.

Vinod Nair, Head of Research at Geojit Investments, said AI is triggering a structural transformation in Indian IT services by compressing timelines and automating routine tasks. “Layoffs are likely in routine-heavy areas as fewer people will be needed to deliver the same outcomes. Clients are shifting toward outcome-based pricing, and in the coming quarters AI adoption could create headwinds for deal wins, potentially impacting topline. Monitoring deal flow will be critical,” he said.

Kenneth Andrade, CIO at Old Bridge Mutual Fund, noted that sector-wide profit surges are unlikely going forward. Growth is becoming company-specific as market share shifts and structural challenges reshape valuations. “It’s no longer a broad play — only a select company or two truly makes sense in this climate,” he said.

What Should Investors Do Now?

Market strategists say selectivity is key. JPMorgan’s strategy team believes the risk-reward balance is gradually tilting toward recovery, given bearish positioning and still-solid fundamentals. They recommend increasing exposure to high-quality software companies that are better positioned to adapt to AI-driven changes.

For investors, the message is clear: the sector is undergoing a structural transition rather than a cyclical slowdown. Near-term volatility may persist, but long-term winners are likely to be firms that successfully pivot from manpower-driven outsourcing to AI-enabled, outcome-focused technology services.

Not the First Time the Tech Sector Has Faced Disruption Fears

The IT industry has historically gone through phases of panic during technological transitions.

Y2K era (late 1990s): Fears that computer systems would crash at the turn of the millennium triggered massive global spending to fix legacy code. While markets were volatile, the demand surge ultimately helped Indian IT firms scale globally and build their reputation.

Outsourcing wave (mid-2000s): Western economies feared job losses to low-cost destinations such as India and the Philippines. Although it caused short-term disruptions and wage pressure, outsourcing ended up expanding the global tech ecosystem and creating new categories of jobs.

Both episodes show that technological shifts often cause short-term market pain but can expand the industry’s long-term opportunity set.

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Stock market recommendations: Bajaj Broking Research recommends buying Tata Power, and Manappuram Finance as the top stocks picks for February 13, 2026 with a 3-month timeframe for target. It also shares its view on Nifty and Bank Nifty:

Index View: NIFTY

Indian benchmark indices traded within a narrow range during the week, exhibiting a positive bias amid supportive domestic cues. Market sentiment remained constructive, underpinned by a revival in Foreign Institutional Investor (FII) inflows. After a phase of sustained outflows, FIIs have turned net buyers, reflecting renewed confidence in India’s macroeconomic fundamentals. The continuation of these inflows is expected to lend further support to equities, particularly in light of improving GDP growth expectations.Investor attention has gradually shifted toward the concluding phase of the third-quarter earnings season. Market participants are closely evaluating corporate earnings performance and forward-looking management commentary to gauge the sustainability of earnings growth. Additionally, upcoming inflation data will be a key monitorable in both India and US, as it may influence expectations regarding the Reserve Bank of India’s and US FOMC future rate decision.Developments related to the proposed trade agreement also remain in focus, with reports suggesting that the final contours are nearing completion. Greater clarity on this front could provide incremental direction to the markets in the near term. Overall, the market undertone remains cautiously optimistic, supported by improving macroeconomic indicators and stabilizing external flows.Nifty post the RBI monetary policy outcome rebounded from the support area of 20 days EMA and tested the immediate resistance area of 26,000 in Wednesday session.Going forward, index sustaining above the key psychological level of 26,000, will open upwards toward the key resistance area of 26,200–26,300 in the coming sessions. However, if it fails to move above the 26,000 levels, the index is likely to consolidate in the range of 25,500-26,000.The overall outlook remains positive, and market dips should be seen as buying opportunities. Immediate support is placed at 25,500–25,400, which aligns with last week’s breakout area and the 20-day EMA.Volatility is likely to remain elevated amid uncertain global cues and the rising crude oil prices.BANKNIFTYBank Nifty traded in a range with positive bias during the current week. PSU banking stocks extended their outperformance. Going ahead, a move above 61,000 levels will lead to further upside toward the 61,400 and 61,800 levels in the coming sessions. Failure to move above 61,000 will signal some consolidation in the range of 59,800-60,800 levelsBias remains positive and we believe dips should be used as buying opportunity, with short term support seen at 59500-59200 levels being the confluence of the 20- and 50-days EMA. Volatility is likely to remain elevated amid uncertain global cues

Stock Recommendations:

Tata PowerBuy in the range of ₹ 373-381

The stock is at the cusp of generating a breakout above a falling supply line joining the highs of October 2025 and January 2026 signaling resumption of up move and offers fresh entry opportunity.We expect the stock to head towards 413 levels in the coming quarters being the high of October 2025 and the upper band of the last 12 months range.Daily 14 periods RSI is in uptrend and is seen sustaining above its nine periods average thus supports the positive bias in the stock.Manappuram FinanceBuy in the range of 300-310

Buying demand is seen emerging from the 52 weeks EMA and the previous major low of October 2025 signaling strength and offers fresh entry opportunity. The stock during last week formed a bullish engulfing candle signaling strength and opening upside towards 332 levels being the 123.6% external retracement of the previous decline.The daily 14 periods RSI is seen rebounding, taking support at its nine periods average thus supports the positive bias in the stock. The weekly stochastic has generated a buy signal.(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)

Shopper footfall rallied in January compared with the disappointing Christmas but remained down on a year earlier, figures show.

Although shopper visits across the UK as a whole were down 0.6% on last January, this was an improvement on the 2.9% decline seen in December, according to British Retail Consortium (BRC)-Sensormatic data.

High street visits fell by a steeper 1.9% year-on-year in January, down from the 0.9% drop seen in December, while shopping centre footfall fell by 0.8% in January but improved from the 5.1% plunge over Christmas.

The best performing cities were in the north, where shopper traffic was hit badly by severe storms last year, and retail parks also recorded positive growth as customers made the most of free parking to shop in person during the January sales.

Scotland recorded the strongest year-on-year growth in footfall, up 5.1%, with Northern Ireland also seeing significant growth of 3.8%.

By contrast, footfall fell across the rest of the UK – by 1.4% in England and 2.8% in Wales.

BRC chief executive Helen Dickinson said: “Although footfall edged down in January compared to a year earlier, it was much better than the disappointing Christmas period.

“An uptick in consumer confidence and possible signs of a footfall recovery offer some cautious optimism for some spring-like green shoots.”

Andy Sumpter from Sensormatic said: “January offered a welcome reset for UK retail, with footfall recording its best performance in five months.

“Some of this uplift will have been driven by savvier spending behaviours, as consumers took advantage of new year promotions and sought out value after a stretched festive period.

“Storm Goretti, however, put a dampener on activity in parts of the month, disrupting travel and suppressing visits — a reminder that weather can play an outsized role in shaping shopper behaviour.”