Battered IT loses weight on Nifty, banking hits new high

The Indian stock market is witnessing a significant shift, with the weight of information technology (IT) stocks on the Nifty index declining to 8.7% from 9.94% at the start of 2026. This reduction has coincided with a rise in the banking sector's weight, which has increased to 27.6% from 26.61%. The downturn in IT stocks, largely attributed to fears surrounding AI disruption and reduced spending in software services, has led to their diminished influence in the market. The Nifty IT index has dropped over 13% this year, contrasting sharply with the 2.3% rise in the Bank Nifty. Concerns over the sector’s prospects have prompted foreign investors to offload nearly ₹75,000 crore in IT stocks in 2025, marking the highest selling across sectors. Analysts suggest that this trend highlights a broader shift in earnings trajectories, with banking and oil & gas sectors gaining prominence as IT struggles to maintain investor confidence. As the market adjusts to these changes, investors remain cautious, closely monitoring the implications of technological advancements on the sector’s future performance.