Market Brief: Indian IT Sector Turmoil Indian equity benchmarks suffered a significant blow on Tuesday, **February 24, 2026**, as a massive selloff in the Information Technology sector dragged the broader market lower. The **Nifty IT Index plunged 4.74%**, hitting a **30-month low** and extending its monthly decline to over **20%**. This downturn reflects mounting investor anxiety over Artificial Intelligence (AI) disruption. Recent catalysts include the launch of advanced AI agents like Anthropic’s **Claude Cowork Agent**, which threatens the traditional labor-arbitrage model. Analysts are concerned that automated tools can now handle complex legacy code modernization, specifically in **COBOL systems**, which previously required extensive manual labor from Indian service providers. Key Market Indicators The benchmark **Nifty 50** declined by **288.35 points (1.12%)** to settle at **25,424.65**, while the **Sensex** plummeted **1,068.73 points (1.28%)** to close at **82,225.92**. The carnage was most visible in large-cap IT stocks, where the combined market capitalization of the top five firms eroded by over **₹84,000 crore** in a single session. * **TCS:** Down **3.21%** to **₹2,590.05** * **Infosys:** Down **3.46%** to **₹1,282.50** * **HCL Tech:** Down **3.94%** to **₹1,370.15** * **Wipro:** Down **2.14%** to **₹201.55** * **Tech Mahindra:** Down **2.95%** to **₹1,399.20** Strategic Shifts and Growth Outlook Despite the immediate market volatility, the long-term outlook remains a subject of intense debate. Industry bodies like Nasscom project the Indian tech industry will reach a **$300 billion revenue milestone by FY2026**, growing at approximately **5.1%**. Global Capability Centers (GCCs) are emerging as a vital sub-sector, projected to lead salary growth with **10.4% increments in 2026**. While critics argue the traditional outsourcing model could "disappear" within five years, proponents suggest that IT firms will pivot to become the "plumbers" of the AI world—integrating complex AI agents into enterprise environments. Valuation and Investor Sentiment The sector is currently trading at a price-to-earnings (**P/E**) ratio of approximately **20.4x**, which is below its 10-year average of **21.6x**. This drop has led some market participants to view the current drawdown as a tactical "buy the dip" opportunity for long-term investors, citing that individual companies may face volatility while the broader tech ecosystem continues to expand. However, sentiment remains fragile. External pressures, including **U.S. tariff policy** uncertainty and rising crude oil prices due to Middle East tensions, continue to weigh on risk appetite. Investors are now looking toward India’s GDP data release on February 27 for further economic cues.