Infosys, Wipro, Persistent, other IT shares fall up to 5% after overnight sell-off in SaaS stocks

Shares of Indian IT companies, Infosys Ltd., Wipro Ltd., Tata Consultancy Services Ltd. (TCS), Persistent Systems Ltd., Coforge Ltd., among others fell up to 5% on Wednesday, February 4, after the software stocks in the US sold-off sharply overnight on resurfaced concerns about the viability of their business models.

Shares of Infosys are down 5% in early trading on Wednesday, while those of TCS are down over 3.5%. Shares of Wipro, HCLTech and Coforge are down 3% each, while those of Persistent Systems and Tech Mahindra are down 4% in early ticks on Dalal Street.

US Software stocks led by Gartner plunged as much as 25% in intraday trading on Tuesday on Wall Street. Gartner eventually ended the day with cuts of 21%. Other major SaaS names, Adobe, Salesforce, Microsoft, also fell between 3% to 8% overnight.

The moves reflected on the Nasdaq as the index fell over 350 points overnight.

The fall in these stocks also had an impact on the US-listed ADRs of Infosys and Wipro, which also declined 6% and 5% respectively overnight. Shares of Accenture and Cognizant also fell up to 10% overnight.

A major trigger behind the sell-off was the launch of Anthropic PBC's legal automated tool, which first led to selling pressure in stocks associated with legal and data services technology. The overnight sell-off seen in stocks across software, financial services and asset management, wiped out over $285 billion in market value on Tuesday.

Anthropic has released 11 new plug-ins for its Claude Cowork agent, which targets document review, compliance and draft legal briefs as well.

The tools for sales and marketing and data workflow threatens companies like Salesforce, DocuSign, Adobe, Workday and ServiceNow.

Claude Agents can also now directly perform tasks that users earlier needed a Salesforce or ServiceNow interface to execute.

India, generally viewed as an anti-AI trade by analysts, is also a major software services provider for many US companies. However, the overall sentiment around software stocks on Wall Street has been bearish, so much so, that Jefferies has gone on to call it a "SaaSpocalypse", stating that the general sentiment around these trades has been one of "get me out."

In an interaction with CNBC-TV18, Arvind Sanger of Geosphere Capital said that the correction is not due to the current earnings but due to the future outlook, adding that the AI disruption being around the corner for legacy IT companies is a subject of worry.

On the flip side, Moshe Katri of Wedbush Securities said that the sell-off appears overdone given the earnings and the initiatives taken by companies and that there will be a spending cycle that focuses on integration and data.

The Nifty IT index gained 1.4% on Tuesday, in-line with the broader market rally. However, the index has not done much so far in 2026, gaining 2%, while it is flat over the last one month. Over the last three months though, the index has risen 8.3%.