vrushangshah93@gmail.com Anthropic AI developer launched plug-ins for its Claude Cowork agent on Friday that would automate tasks across legal, sales, marketing and data analysis. That move has sparked worries of a professional services industry, which were once seen as major beneficiaries of the AI era and due to this Indian IT stocks crashed heavily.
IT stocks crashed as much as 8% after the US tech stocks tumbled overnight on the news of Anthropic developing new AI tools.
Why Investors Reacted Strongly to Anthropic’s new AI Release
That announcement was enough to send shockwaves through the market. Companies that are in the business of selling legal software, professional analytics, and data services plunged on Tuesday, as investors worried the new AI offering could cut into their core businesses.
AI has already taken job of many individuals and now one more AI tool is ready to snatch job from Individuals.
Not just the US Stock market but also Nifty IT plunged 6%, and all the constituents of the sectoral index were trading in the red.
The share price of Persistent Systems, LTIMindtree, Coforge, Infosys, and many other IT stocks tumbled down heavily.
Rout across US tech stocks
US tech stocks saw a sharp decline on Tuesday as investors digested a wave of tech-focused earnings. The S&P 500 cracked 0.8%. The Dow Jones Industrial Average pulled back nearly 0.3%.
The fear was sparked after Anthropic introduced 11 new plug-ins for its Claude co-work agent, which could automate tasks in areas such as legal, sales, marketing, and data analysis on a global scale. Investors are expecting a large disruption across the software ecosystem.
The share price of Nvidia, a US chip giant, dropped nearly 3% amid signs of cooling relations with OpenAI. The startup’s disappointment with Nvidia’s newest AI chips has hindered discussions with the chip manufacturer regarding an investment of as much as $100 billion.
Both Amazon and Microsoft experienced a decline as software stocks continued to be sold off.
Sharp sell-off in Indian American Depository Receipts (ADRs)
The sharp sell-off in the US tech stocks led to a fall in Indian tech stocks’ American Depository Receipts (ADRs).
The ADRs listed on the New York Stock Exchange – Infosys and Wipro – fell as much as 5.5%. The share price of Infosys dropped to $17.32, down 5.5%, while that of Wipro plunged 4.8% to close at $2.56.
Investors focused on Indian markets tend to follow ADRs. Since the US market trades while India is asleep, ADRs provide the first reaction to global events before the NSE and BSE open the next morning.
As ADRs shown in red so IT stocks are definitely going to be fall.
WEAK GLOBAL CUES
The broader tech correction in the US created a risk-off mood across markets. Whenever global tech stumbles, Indian IT gets hit first because a large part of sector revenue comes from overseas clients. Indian stock market mostly correlates with the US Stock market so whenever the US stock market is corrected then Indian stock market also gets corrected.
Mid-tier IT stocks fell even more sharply between 4 and 7 percent as stop-loss orders kicked in and traders reduced exposure. The Nifty IT index was among the worst performers of the morning.
India’s information technology stocks declined on Thursday as mixed analyst reactions to first-quarter earnings and disappointing results from several firms pulled the Nifty IT index down by over 1.5 per cent.
Shares of Persistent Systems and Coforge tumbled over 8 per cent each during the day. Heavyweight stocks like Infosys and Tech Mahindra fell over 1.5 per cent on Thursday, compared to the 1.67 per cent decline in the benchmark Nifty IT index as of 11:15 AM.
The Indian stock market has recorded a high level after the India-US deal but the very next day due to heavy fall in the US stock market due to the news of Anthropic developing new AI tools, the Indian stock market also gets corrected.
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