Infosys ADRs fall over 7%, Wipro falls 5% as technical turbulence increases on Wall Street

Infosys’ American Depositary Receipts (ADRs) fell more than 7% on Thursday, hitting an intraday low of $14.59 in early trade, while Wipro’s ADRs fell 5.4% to $2.26. The sharp decline follows a steep sell-off in IT stocks on Indian stock markets, with the weakness spilling over to Wall Street.The broader U.S. tech drag added pressure as the Nasdaq Composite fell more than 300 points, or more than 1%. At around 11:11 a.m. ET (9:43 p.m. IST), the Nasdaq was trading at 22,764.90. The S&P 500 fell 0.6% to 6,902.80, while the Dow Jones Industrial Average fell 249.27 points, or 0.50%, to 49,872.10.

Cisco fell 11%, while heavyweights like Apple, Nvidia and IBM fell up to 6% around this time.

Earlier today, Indian benchmark indices ended with sharp cuts led by technology stocks. The Nifty IT index fell 5.5% lower with all ten stocks moving into the red.

Panic selling swept across India’s technology sector today, eroding the combined market capitalization of IT stocks by Rs 1.3 lakh crore. Lingering fears of AI-induced disruption in the sector, compounded by stronger-than-expected US jobs data that dampened hopes for near-term rate cuts, led to the decline.

Nifty IT is the worst performing index, down 21% in the last twelve months.

Vinod Nair, head of Research Geojit Investments, said today’s decline in Indian IT stocks was driven by stronger-than-expected employment data in the US, with a marginal decline in the unemployment rate, which has dampened expectations of an early rate cut by the US Federal Reserve. These pressures were further exacerbated by ongoing concerns about AI-induced disruption in the sector, he said. On AI-related fears, Nair said AI is bringing a structural shift in Indian IT services by shortening timelines and automating tasks, putting pressure on the traditional headcount-based outsourcing model.

“Layoffs are likely to occur in highly routine areas as fewer people will be needed to achieve the same results. Even ERP implementation, as highlighted by Palantir’s recent focus, is now vulnerable to AI disruption. Customers are shifting to outcome-based pricing. In the coming quarters, AI adoption could create headwinds in deal wins, potentially impacting revenue, making close monitoring of deal flow essential to assess its true impact,” he warned.