Nifty IT falls 1.5% as AI trade bounces back on Anthropic IPO filing; TCS, Infosys lead losses
The Nifty IT index fell 1.5% on October 27. A filing by Anthropic PBC to begin the process of selling shares to the public gave a much-needed boost to confidence in AI-related investments. It also helped semiconductor stocks rise in South Korea and Japan.
Infosys shares fell 1.58%, reversing the 1.1% gain in the previous trading session.
Infosys, India's second-largest software services company by revenue, lowered its revenue growth forecast for the 2027 financial year. This came after it reported higher-than-expected revenue for the quarter ending in September, after markets closed on Friday.
Other stocks that fell included Tata Consultancy Services, down 2%, and Coforge, down 1.4%.
At 11:30 a.m. on October 27, the Nifty IT index was down 1.5% at 31,796.8. It had fallen more than any other sector index.
Shares of Samsung Electronics Co. and SK Hynix Inc. each rose more than 4%. This helped South Korea's main stock index, the Kospi, climb as much as 4.9%. Japan's Nikkei 225 Stock Average rose as much as 2.4%, while Advantest Corp. shares gained more than 9%. Chip stocks moved in different directions in Taiwan and China.
News that Anthropic, the company behind Claude, had moved closer to listing its shares on the stock market led a series of overnight developments that helped ease recent concerns about how AI companies are paying for their growth. Other news included a $40 billion equipment-financing lease for SpaceX and Meta Platforms Inc.'s plan to sell $95 billion worth of shares.
“Anthropic’s landmark IPO filing alongside Meta’s aggressive capex push has reignited broader risk appetite, pulling capital out of its defensive crouch and firmly restoring chip stocks back to the driver’s seat,” said Hebe Chen, a market analyst at Vantage Global Prime. In other words, the news encouraged investors to take more risks and buy chip stocks again.
The rise in chip stocks came before Samsung and SK Hynix report their earnings this week. Reports are also due from major technology companies that spend heavily on AI, including Amazon.com Inc. and Alphabet Inc. These results will give investors more clues about whether the AI stock rally is strong enough to continue. The rally has struggled to recover since a selloff over the summer.
Earlier this month, the Nifty IT index rose nearly 14% over six trading sessions while AI-related stocks around the world were selling off.
Concerns have grown about whether companies can keep finding enough money to build AI systems around the world, especially as debt levels rise sharply. Investors have also questioned whether future profits will be large enough to justify the high prices of these stocks. These concerns have contributed to disappointing stock market launches and share-sale deals being cancelled.
Against this background, Anthropic's document for its planned stock market listing offered some relief. The listing could become the largest ever. The document explained how the company's products could generate billions of dollars in annual sales. It also described the resources available to pay for the chips and related equipment needed to develop and run its products.
The Kospi remains down more than 35% from its peak in June, partly because shares of Samsung and SK Hynix have fallen. Foreign investors have sold more than $150 billion worth of South Korean index stocks this year, after subtracting their purchases from their sales.