TCS, Infosys, Wipro Hit Hard as US-Iran War Sparks IT Sell-Off

Indian IT stocks suffered a sharp sell-off on Monday, March 2, 2026, with major companies like Tata Consultancy Services (TCS), Infosys, Wipro, and HCL Technologies losing up to 6% intraday. The decline extended the sector’s February losses, where a massive ₹5.7 lakh crore market-cap erosion occurred due to fears around artificial intelligence (AI) disrupting traditional IT services. The Nifty IT Index opened March with a drop of over 2%, nearing its 52-week low of approximately 29,875 points, reflecting heightened weakness and risk-off sentiment.

The IT sector has been under pressure from two main factors. First, the AI-led disruption wave has unsettled investors. The introduction of automation and enterprise workflow tools has fueled concerns that conventional human-led IT outsourcing services could shrink or become obsolete. Analysts warn that the adoption of AI could gradually compress demand for labor-intensive IT services, prompting continued selling in the sector.

Second, the geopolitical escalation between the United States and Iran has added fresh uncertainty. Rising crude oil prices, global risk-off sentiment, and potential tightening of corporate budgets in key markets like the US, Europe, and West Asia could delay discretionary spending on IT projects. Investors are moving away from cyclical and growth sectors, like IT, toward defensive assets, further pressuring equities. Experts note that this is not about AI rendering IT irrelevant but about macroeconomic risk compression affecting investment sentiment and demand visibility.

Among individual stocks, Persistent Systems was the worst performer, falling about 6%, while Coforge dropped around 4.8% to near one-year lows. Large-cap IT firms such as TCS, Infosys, HCL, and Wipro also shed 1.5–3%, collectively dragging down the broader IT index. Analysts caution that ongoing geopolitical tensions and AI-related disruption fears may continue to affect investor confidence in the sector in the near term.

In summary, the Indian IT sector is facing a dual challenge: AI-driven automation fears and heightened global geopolitical risks from the US-Iran conflict. These combined pressures have triggered significant sell-offs, underlining the vulnerability of IT equities to both technological disruption and macroeconomic shocks. While the longer-term impact of AI remains uncertain, short-term volatility is likely to persist as markets digest the twin threats of innovation disruption and geopolitical instability.