IT Stocks Continue to Fall on 4 June 2026: TCS, Wipro and Infosys Drag Nifty IT Down Amid AI Jitters

IT stocks continued their fall on 4 June 2026, with the Nifty IT index trading at 29,300.05, down 84.40 points or 0.29%, as TCS, Wipro, Infosys, and other technology names extended losses from the sharp selloff in the previous session. The IT stocks decline on 4 June follows a brutal 3 June session where the Nifty IT index crashed 1,815 points or nearly 5.8%, with TCS plunging 8.76%, LTIMindtree declining 7.54%, Tech Mahindra dropping 6%, HCL Technologies falling 4.82%, Infosys sliding 4.11%, and Wipro shedding 3.20%.

The sustained pressure on IT stocks reflects a structural narrative shift: investors are increasingly convinced that generative AI tools from US companies are automating workflows traditionally performed by Indian IT services firms. Bloomberg noted that a gauge of the sector reversed a gain of more than 4% from the prior session, when investors had cheered Nvidia CEO Jensen Huang’s comments dismissing AI disruption concerns, only for overnight weakness in Infosys and Wipro ADRs to renew selling pressure on IT stocks today.

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IT Stocks Today: Nifty IT and Stock-Wise Performance on 4 June 2026

The Nifty IT index has been one of the worst-performing sectoral indices on Dalal Street throughout 2026, and the sector’s performance on 4 June 2026 continues that trend. The index has now declined approximately 22% in the calendar year 2026, following a 26% fall in 2025.

IT Stock	3 Jun Session Change	Key Driver
TCS	Down 8.76% (intraday low -9%)	Profit booking + AI fears; 30% down YTD 2026
LTIMindtree	Down 7.54%	AI disruption concern; sector-wide selling
Tech Mahindra	Down 6.08%	ADR weakness; global tech sentiment
HCL Technologies	Down 4.82%	Profit booking post recovery rally
Infosys	Down 4.11%	ADR down 2.5% overnight; AI structural concern
Coforge	Down 4.9%	Mid-tier IT under pressure across board
Persistent Systems	Down 5.85%	AI disruption fears in niche IT segments
Wipro	Down 3.20%	ADR down 8% overnight; AI workflow automation fear
Nifty IT Index	Down ~5.8% on 3 Jun; -0.29% on 4 Jun	Continuing slide into 4 June 2026

Why Are IT Stocks Falling? Key Reasons Behind the AI Jitters

IT stocks are falling for a combination of structural and technical reasons on 4 June 2026. Understanding both dimensions is important for investors assessing whether the current fall in IT stocks represents a buying opportunity or the beginning of a longer downtrend.

AI Disruption: The Core Structural Fear Driving IT Stocks Lower

The primary reason IT stocks are under pressure in 2026 is generative AI disruption. Tools from US AI companies including Anthropic have been rolling out automation capabilities that can handle tasks traditionally performed by Indian IT services teams — legal review, data analysis, marketing workflows, sales operations, and software testing. Each new capability announcement renews fear that Indian IT companies will see shrinking demand for their core services, compressing both revenue and margins.

Kotak Institutional Equities analysts led by Kawaljeet Saluja noted that while new AI opportunities such as legacy modernization would increase, they did not expect these to compensate for the deflation in traditional IT services spending. Ambit Capital noted that while IT services have a role in enterprise AI implementation, AI deflation will exceed incremental demand. Research analyst Rishubh Vasa of Indsec Securities and Finance projected that the total addressable market of domestic IT companies could shrink by 20 to 25% due to AI-driven automation.

ADR Weakness: Overnight Signal That Hits IT Stocks at Open

IT stocks in India are heavily influenced by the performance of their American Depositary Receipts (ADRs) in US markets. Overnight on 3 June 2026, Wipro ADRs declined more than 8% and Infosys ADRs fell 2.5%, providing a clear negative signal for how IT stocks would trade on the Indian exchanges on 4 June. This ADR-driven selling mechanism amplifies both positive and negative sentiment moves in IT stocks on a daily basis.

Profit Booking After a Sharp Recovery Rally

IT stocks had staged a sharp 7 to 8% rebound over two sessions before the selloff, when investors bought beaten-down IT names on optimism around AI spending and expectations of lower US interest rates. Once the relief rally ran out of momentum and ADRs weakened overnight, profit booking was inevitable. TCS had surged in the prior sessions before giving back much of the gains in the 3 June crash. Infosys had gained more than 5% on one session before reversing sharply. The pattern suggests that the sector remains in a structural downtrend interrupted by technical relief rallies, rather than a sustained recovery.

Brokerage Downgrades and Structural Caution

IT stocks have been on the receiving end of multiple brokerage downgrades through 2026. Jefferies downgraded six major Indian IT companies, noting that AI may structurally change the IT business mix toward consulting and implementation while reducing managed services. Goldman Sachs downgraded TCS, Wipro, and Mphasis. Motilal Oswal downgraded Infosys to Neutral and Wipro to Sell. Each downgrade round has accelerated selling in IT stocks and further pressured the Nifty IT index.

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IT Stocks and the AI Question: What Do Companies Say?

These companies have faced a credibility challenge as they publicly embrace AI while investors worry about the impact on their own business. Major Indian IT firms including TCS, Infosys, HCL Technologies, and Wipro have all announced large-scale AI training programmes and are positioning as AI implementation partners for enterprise clients. TCS and Wipro alone have trained hundreds of thousands of employees in AI tools.

However, the market is skeptical that IT services revenue from AI implementation will be enough to offset the deflation in traditional managed services and legacy maintenance. Fourth-quarter FY26 earnings results largely confirmed the challenges facing IT stocks, with companies citing cautious client spending, delayed deal closures, and ongoing pressure on discretionary IT budgets from enterprise customers who are prioritising capital expenditure over IT services spending.

Key Risks and What to Watch for IT Stocks

Watch: Enterprise AI Adoption Pace

The single biggest variable for IT stocks going forward is the pace at which enterprise clients actually adopt AI tools and whether that adoption creates new revenue streams for Indian IT services firms or simply reduces headcount requirements. Companies like TCS and Infosys are betting on AI consulting and implementation as a growth driver, but the revenue ramp in these areas has not yet been fast enough to offset deflation in existing services for IT stocks to re-rate higher.

Watch: Quarterly Guidance from TCS, Infosys, Wipro

Each quarterly result and guidance update from the top three — TCS, Infosys, and Wipro — functions as a sector-wide catalyst. Investors will be watching the next earnings cycle closely for any change in revenue trajectory, deal wins in AI-linked services, and margin guidance. A positive guidance surprise from any of the three leaders could trigger a sharp relief rally, while a downgrade in guidance could extend the current downtrend.

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Conclusion

IT stocks continued to fall on 4 June 2026, with the Nifty IT index at 29,300 and extending the sharp 5.8% decline from 3 June. The fall is driven by persistent AI disruption fears, ADR weakness in Infosys and Wipro, profit booking after a short-lived relief rally, and ongoing brokerage downgrades. While Indian IT companies including TCS, Infosys, HCL Technologies, and Wipro are all investing in AI capabilities, the market remains unconvinced that new AI-related revenues will compensate for deflation in traditional IT services. IT stocks are down approximately 22% in 2026 YTD, with the structural AI debate likely to remain the dominant driver of sentiment in the near term.

Investments in securities are subject to market risk. This content is for educational purposes only and does not constitute investment advice.

Frequently Asked Questions on IT Stocks Today

Why are IT stocks falling today on 4 June 2026?

Ans. IT stocks are falling today on 4 June 2026 due to AI disruption fears, profit booking after a short-lived relief rally, and weakness in Infosys and Wipro ADRs overnight. The Nifty IT index was trading at 29,300.05, down 0.29%, extending the sharp 5.8% decline from 3 June 2026.

What is the Nifty IT index level today on 4 June 2026?

Ans. The Nifty IT index was trading at 29,300.05, down 84.40 points or 0.29%, on 4 June 2026. On 3 June 2026, the index had crashed 1,815 points or nearly 5.8%, with TCS falling 8.76%, LTIMindtree 7.54%, Tech Mahindra 6%, HCL Technologies 4.82%, Infosys 4.11%, and Wipro 3.20%.

How much has TCS stock fallen in 2026?

Ans. TCS has lost approximately 30% on a year-to-date basis in 2026 as of early June. On 3 June 2026, TCS shares fell 8.76%, touching an intraday low of nearly 9%. The decline in TCS and other IT stocks reflects structural concerns about AI disrupting India’s traditional IT outsourcing business model.

What is the AI jitters impact on Indian IT stocks?

Ans. AI jitters refer to investor concerns that generative AI tools from US companies such as Anthropic are automating workflows traditionally handled by Indian IT services firms. The fear is that AI could reduce demand for legacy IT services and shrink the total addressable market for Indian IT stocks by 20 to 25% according to some analysts, compressing margins as automation displaces human-driven workflows.

Are Infosys shares falling today on 4 June 2026?

Ans. Yes, Infosys shares continued to slide on 4 June 2026, extending weakness from the 3 June session where the stock fell over 4% to around Rs 1,227 to Rs 1,232. The fall in Infosys reflects both AI disruption fears and profit booking after a strong relief rally earlier in the week. Infosys ADRs had also declined 2.5% overnight in US markets.

What should IT sector investors watch after the current fall?

Ans. IT sector investors should watch four key factors: the pace of generative AI adoption by enterprise clients; quarterly earnings guidance from TCS, Infosys, and Wipro for commentary on AI-related demand; global technology spending trends; and any brokerage upgrades or downgrades of major technology names. This article does not constitute investment advice. Consult a SEBI-registered financial advisor.

What is the long-term outlook for Indian IT stocks amid AI fears?

Ans. The long-term outlook for Indian IT stocks remains debated. Kotak Institutional Equities noted that new AI opportunities like legacy modernization may not compensate for service deflation. Ambit Capital said AI deflation will exceed incremental demand. Some analysts see a 20 to 25% shrinkage in the total addressable market. Indian IT companies have been investing heavily in AI capabilities and retraining employees, but the market is yet to reward these efforts in technology valuations.

How has Nifty IT performed in 2026?

Ans. Nifty IT has declined approximately 22% in 2026 as of early June 2026, following a 26% decline in 2025. The sustained selling pressure in IT stocks reflects ongoing investor concern about AI disruption, global technology spending caution, and the structural risk to India’s traditional IT outsourcing business model as generative AI tools become more capable.