**Market Brief: Indian IT Sector Automates a Sell-Off** **The Event** Indian IT stocks witnessed their steepest single-day decline in nearly six years on Wednesday, February 4. The **Nifty IT index plunged ~6-7%**, erasing approximately **₹1.9 lakh crore** in market capitalisation. This rout mirrors a broader global tech sell-off, dubbed by some analysts as the "SaaSpocalypse." **The Trigger: Anthropic’s "Agentic" Shift** The catalyst was the launch of new **Claude Cowork** plugins by AI firm Anthropic. Unlike previous chatbots that acted as assistants, these new "agentic" tools are designed to autonomously execute complex, multi-step workflows in legal, sales, and data analysis—tasks traditionally outsourced to Indian IT firms. Investors panicked over the release of a specific **Legal Plugin**, which automates contract reviews, NDA processing, and compliance checks. The fear is that AI is moving from a productivity tool to a direct replacement for billable human hours, threatening the core "seat-based" revenue models of IT services. **Key Market Movers** Major Indian IT heavyweights bore the brunt of the damage: * **Infosys:** Crashed over **7%** (worst single-day loss since April 2023). * **TCS:** Dropped nearly **7%**. * **Wipro & HCLTech:** Slid between **4% and 6%**. * **Global Context:** The sell-off tracked a **$285 billion** wipeout in global software stocks, with companies like Thomson Reuters and LegalZoom falling **15-20%**. **The Sentiment: "SaaSpocalypse" vs. Overreaction** Market sentiment has shifted aggressively. Analysts at **Jefferies** noted that the narrative has flipped from "AI helps these companies" to "AI replaces these companies." The immediate concern is that enterprise clients may cut outsourcing budgets in favor of AI agents that don't sleep or charge hourly rates. However, industry leaders argue this is a temporary shock. **Tech Mahindra** leadership labeled the crash a "massive overreaction," suggesting that while SaaS models are under pressure, legacy enterprise integration will still require significant human oversight. **Current Outlook** As of Thursday morning, volatility remains high. Investors are now keenly watching for commentary from upcoming earnings calls to see if deal pipelines are actually shrinking or if this is purely a sentiment-driven correction. The market is effectively repricing the sector for a future where headcount growth may no longer correlate with revenue growth.