HCL Tech, TCS, Infosys jump 5-7% as AI slowdown calls lift IT stocks; Nifty IT surges nearly 5%

Fresh updates from the financial markets indicate that Indian IT stocks surged on Tuesday, with HCL Tech jumping nearly 7 percent and TCS and Infosys gaining around 5 percent each, after leading artificial intelligence executives called for a slowdown in AI development. The surge propelled the Nifty IT index nearly 5 percent elevated and made technology stocks the biggest drivers of upside on the Nifty 50 in morning trade.

The Nifty IT index was up 4.69 percent at 30,279 around 9:44 am, making it the top sectoral gainer by a wide margin. Five large IT stocks featured among the top Nifty 50 gainers.

HCL Tech shares were up 6.75 percent at Rs 1,287.5, Tech Mahindra was 5.29 percent elevated at Rs 1,622.5 and TCS advanced 5.26 percent to Rs 2,316.6. Infosys advanced 4.91 percent to Rs 1,088.7, while Wipro advanced 2.9 percent to Rs 172.26.

The surge additionally spread to midcap technology stocks. Mphasis jumped 5.69 percent to Rs 2,424.7, KPIT Technologies rose 4.35 percent to Rs 578.1 and Tata Elxsi advanced 4.22 percent to Rs 3,528. Hexaware Technologies advanced 3.86 percent to Rs 516.4, while Persistent Systems was up 3.26 percent at Rs 5,717.7.

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The sharp move in Indian IT shares came after calls from some of the world's most prominent AI executives to slow the development of increasingly powerful models amid concerns over potential risks from the technology.

Anthropic CEO Dario Amodei, in an essay shared on X on Saturday, called on AI firms to slow the rate at which they advance model capabilities amid mounting concerns that AI could be misused. OpenAI CEO Sam Altman and xAI chief Elon Musk stated they agreed with Amodei. Altman additionally stated OpenAI would not proceed with an IPO this year, citing safety concerns.

The warnings had the opposite effect on major AI-linked stocks globally. Such stocks declined sharply on Monday, while Wall Street ended softer as losses in Nvidia and other chipmakers weighed on the market. The warnings boosted questions over the pace of AI development and the billions of dollars being invested in infrastructure supporting the technology.

That stated, for Indian IT services stocks, market participants responded positively to the prospect of slower AI development. The sector has been a major market laggard during the past year as the rapid emergence of new AI tools threatened the business models of traditional software services firms and boosted concerns over the extent to which existing technology work could be automated.

In the meantime, US President Donald Trump played down concerns over misuse of the technology, saying existing US safeguards were adequate and arguing that China would benefit from doubts over AI development.

The resilience in IT stocks helped keep the broader Indian market in positive territory despite softness across several other sectors. At 9:44 am, the Sensex was up 260 points, or 0.35 percent, at 75,042, while the Nifty 50 advanced 65 points, or 0.28 percent, to 23,463.

The contrast across sectors was sharp. While the Nifty IT surged nearly 5 percent, the Nifty Realty index declined 0.75 percent, Nifty Metal declined 0.79 percent and the Nifty Energy index was down 0.49 percent. The Nifty Midcap 100 and Nifty Smallcap 100 were additionally marginally softer, underscoring the outsized contribution of large IT stocks to the key market indices' upside.