**MARKET BRIEF: NIFTY IT CRASHES ON AI FEARS (FEB 4, 2026)** **The Plunge** Indian IT stocks witnessed a massive selloff today, February 4, 2026, marking one of the darkest days for the sector in recent history. The Nifty IT index collapsed by **5.87%**, wiping out significant investor wealth in a single session. This sharp decline makes today’s fall the steepest single-day drop for the index since the **March 2020** COVID-19 market rout. **The Trigger: AI Disruption Fears** The panic was sparked by news from the United States, where AI startup Anthropic unveiled its latest "Claude Cowork" automation agents. These new tools aim to automate complex professional workflows—such as legal reviews, sales operations, and coding tasks—reigniting existential fears for traditional IT service models. Investors are concerned that "agentic AI" could rapidly erode the pricing power and competitive moats of Indian IT majors, leading to what some analysts are calling a potential "SaaSpocalypse." **Key Stock Performance** The selloff was broad-based, with all 10 constituents of the Nifty IT index ending in the red. **Infosys** was the biggest drag, plummeting over **7%** to hit intraday lows not seen in months. **Tata Consultancy Services (TCS)** dropped approximately **6%**, shedding massive market capitalization. **LTIMindtree**, **Coforge**, and **Persistent Systems** also faced severe pressure, falling between **5%** and **7%**. **Historical Context** Today’s crash rewrites recent market history. While the Nifty IT index has seen volatility before, the magnitude of this fall stands out. **April 12, 2013:** The index recorded its worst-ever single-day crash, plunging nearly **12%** (revised from earlier estimates of 9.6%) due to weak guidance from Infosys. **March 2020:** During the onset of the global pandemic, the index suffered a comparable collapse of approximately **9.6%**. **February 4, 2026:** Today's **~6%** fall is the most significant since that 2020 event, far exceeding the volatility seen during the 2022 correction. **Global Cues** The domestic selloff mirrored weakness on Wall Street. The tech-heavy **Nasdaq** fell **1.4%** overnight, with US software stocks shedding billions in value. Global players like Thomson Reuters and LegalZoom also saw double-digit declines, reinforcing the narrative that AI disruption is a global sector-wide risk. **Market Sentiment** Sentiment remains extremely fragile. The Nifty 50 index managed to close flat to marginally positive only due to support from defensive sectors like Oil & Gas and Utilities, masking the carnage in technology stocks. Foreign Institutional Investors (FIIs) have reportedly turned net sellers in the IT space, rotating funds out of software services amid the uncertainty. Technical indicators for the IT sector have turned bearish, with the index breaking below key moving averages. Traders are now watching for stability near the **36,000** support level, though volatility is expected to persist as the market digests the long-term impact of generative AI on Indian service providers. **Next Steps** I can generate a technical chart comparison of today's drop versus the 2020 crash or provide a detailed breakdown of the valuation changes for TCS and Infosys.