I've been tracking NIFTY IT closely, and what's happening right now is brutal. The index has crashed 21% in February 2026 alone. That's ₹6.4 lakh crore wiped out in four weeks. It hit 30,749 on Feb 24, down from recent highs near 40,000. Every single stock is bleeding.
The red candles keep piling up. This isn't the regular correction. Three events hit one after another, and each one made it worse.
Anthropic released Claude Cowork in early February, AI agent that can handle legal, sales, finance, and marketing work autonomously. The market immediately questioned what legacy IT services are worth. In one session, global software companies lost $285 billion. Nifty IT fell 6% that day. Infosys dropped 8%, Persistent 8%, TCS 6%. That was just the beginning.
Then on Feb 23, Anthropic announced Claude Code can automate COBOL modernization. IBM's entire mainframe business is built around COBOL consulting. IBM crashed 13.2% in one day, its worst fall since October 2000. It's now down 27% in February, heading for its worst month since 1968.
The damage so far:
Here's why this matters: 95% of US ATM transactions run on COBOL. It's the hidden backbone of global finance. And AI just told the market it can replace thousands of consultants managing it.
What analysts are saying:
Jefferies is bearish. Downgraded 6 IT stocks, cut targets 30-33%. Structural AI risk. Only 6% earnings growth forecast for next three years.
CLSA thinks it's overdone. Channel checks show no shift in deals or spending yet. Still bullish on Infosys, Tech Mahindra, Coforge, and Persistent.
Motilal Oswal sees it as cyclical. CY26 is the bottom. Expects pickup in H2 FY27 as AI services deploy at scale.
FIIs dumped ₹85,000 crore of IT stocks in February. Holdings at ₹4.49 lakh crore, lowest in four years. Mutual funds cut holdings from ₹3.95 lakh crore to ₹3.2 lakh crore. When both sell together, that's serious.
What's your take on this? Is Indian IT's golden run over, or is this panic selling creating a buying opportunity?