IT Stocks Tumble as Nifty IT Hits 10-Month Low
Selling pressure intensified in technology stocks, with the Nifty IT index plunging 5.74% to a 10-month low. Concerns over AI-led business model disruption and reduced expectations of near-term US rate cuts weighed heavily on the sector.
Strong US employment data has pushed Treasury yields higher, diminishing the likelihood of immediate Federal Reserve easing. The correction in IT stocks extends a broader two-year underperformance trend, during which major players such as TCS, Wipro and HCL Tech have seen significant erosion in market value.
The weakness is also spilling into ancillary segments. Bengaluru-based real estate companies, whose demand visibility is closely linked to tech-sector hiring, are beginning to reflect pressure amid slower recruitment trends.
AI Debate: India’s Strategic Opportunity
While AI disruption concerns weigh on parts of the technology sector, industry leaders argue that India holds structural advantages in the global AI transition. Cost efficiencies, engineering talent depth, and digital public infrastructure may position the country to expand access to research and applied AI tools.
The broader narrative suggests that AI could lower barriers to advanced research and innovation, particularly in emerging markets.
CPI Base Year Revised; Retail Inflation at 2.75%
India released a revised Consumer Price Index (CPI) series with the base year updated from 2012 to 2024 and the basket expanded to over 350 items.
Retail inflation for January stood at 2.75% under the new series. State-level data indicated Telangana recorded the highest inflation reading, overtaking Kerala. The updated dataset also highlighted a narrowing gap between urban and rural inflation. Jewellery prices — particularly silver and gold — registered notable increases.
Trade Talks: Apparel Exporters May Benefit
Commerce Minister Piyush Goyal indicated that India’s apparel exporters could receive a zero-reciprocal-duty window similar to Bangladesh for garments made using US-sourced cotton, contingent on the signing of an interim trade pact between India and the United States.
Separately, revisions to official US communications on the proposed trade arrangement aligned more closely with the earlier India-US joint statement, removing references to pulses and digital trade.
Banking Reform: Foreign Bank Voting Rights Under Review
The government is reportedly evaluating a proposal to allow foreign banks voting rights proportional to their shareholding. Currently, voting rights are capped at 26%, irrespective of ownership levels.
If implemented, the reform could enhance governance alignment and foreign participation in the banking sector.
NSE IPO Moves Forward
The National Stock Exchange’s long-awaited IPO process is progressing. Rothschild has reportedly been selected as an independent advisor to oversee the listing framework. The exchange’s board has also reconstituted its IPO committee to supervise activities related to the proposed share sale.
GCC Employment: Layoffs and Expansion Coexist
India-based global capability centres (GCCs) reportedly laid off approximately 5,500–6,000 employees last year across sectors including engineering, automotive, aerospace and retail. Workforce adjustments were attributed to sector-specific pressures and AI-led restructuring.
Despite this, India witnessed strong GCC expansion, with an estimated 150,000 new jobs added through fresh centre openings during the same period.
Uttar Pradesh Budget Sees Sharp Expansion
With state elections approaching next year, Uttar Pradesh announced a ₹9.12 lakh crore budget — reflecting a 27% increase in spending, the largest expansion in a decade.
The budget seeks to balance infrastructure and development priorities alongside pre-election fiscal positioning.
