The Nifty IT index tumbled 19.5% in February, its worst monthly fall in 17 years since the nearly 21% drop in September 2008, as fears of an AI-led disruption rattled the sector.

The index declined in 12 out of 21 trading sessions, wiping out nearly Rs 5.7 lakh crore in market capitalisation during the month, according to data from the ET Intelligence Group.

Selling pressure intensified after Anthropic, a US-based artificial intelligence firm, unveiled its tools Claude Cowork and Claude Code, triggering a sell-off in technology services stocks across the US and India.

On Friday the Nifty IT index edged up 0.16% to 30,603.85, even as the benchmark Nifty fell 318 points, or 1.25%, to 25,178.65. The Nifty has declined 0.6% for the month.

Among individual stocks, Coforge, LTIMindtree, Tech Mahindra, Persistent Systems, and Infosys fell more than the index, dropping between 21% and 28%, with Coforge the worst hit. Oracle Financial Services declined the least, by 10.7%, followed by Wipro, while Tata Consultancy Services, Mphasis and HCL Technologies fell by 15–18%.

Sweetgreen’s SG -9.61%decrease; red down pointing triangle sales continued their fall despite price increases and a transformation plan to try to turn around dwindling traffic.

The salad restaurant chain on Thursday posted a loss of $49.7 million, or 42 cents a share, compared with a loss of $29.0 million, or 25 cents a share, a year earlier. Analysts were expecting a loss of 32 cents a share.

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Bihar government’s move to regulate microfinance institutions may hobble the recovery of the sector, which had shown signs of recovery from stress after long years.

The state’s legislative assembly adopted the Bihar Micro Finance Institutions (Regulations of Money Lending and Prevention of Coercive Actions) Bill, 2026, on Thursday, creating a sense of deja vu. The bill has a provision which prohibits borrowing from more than two lenders, while the microfinance industry currently allows a three-lender association for a single borrower.

Bihar, being the biggest microfinance market, may see a dip in repayment, people tracking the market said. The state accounts for 15% of the microfinance industry, while 13% of its borrowers have more than three lender associations, industry data showed.

The lenders are facing a risk of a sharp rise in delinquencies as they had seen in Karnataka, where portfolios at risk with over 30 days past due tripled to 12.5% within two quarters of Karnataka‘s microfinance bill, IIFL Capital Services said in a note. Borrowers with low per capita income and literacy may be more vulnerable, it said.

“Event risk like this makes us structurally cautious on lenders with high microfinance exposure apart from structurally lower growth/profitability vs previous cycle during ‘normal’ times,” IIFL Capital’s research analyst Viral Shah said.

Private banks and non-banking financial companies-microfinance institutions (NBFC-MFIs) have grown their respective cumulative microfinance portfolios in January from December, after a phase of contraction, according to monthly data from credit bureau Equifax.
Now, the leaders of the sector will have to energise the field force all over again in Bihar to raise borrower engagement so that any fresh delay in repayment can be prevented. It was typically seen that borrowers tended to delay repayment when governments tried to regulate any sector. It was seen when states like Karnataka and Tamil Nadu enacted laws to regulate microfinance.However, the negative impact was more pronounced in Karnataka than in Tamil Nadu.

“We expect Bihar to be headed the Tamil Nadu way,” a chief executive of a large NBFC-MFI said.

The microfinance self-regulators plan to carry out targeted awareness and outreach initiatives across Bihar to prevent erosion of asset quality.

The Microfinance Industry Network (MFIN) highlighted that the bill is directed at unregulated entities. However, the provisions in the bill relating to borrower protection and fair recovery practices apply to all lending entities.

“MFIN would like to caution microfinance borrowers not to fall prey to rumours, be regular in repayment to maintain a good credit record and contact their lender for information,” it said.

“It is noteworthy that RBI-regulated institutions, as on date, provide collateral-free and doorstep credit services to nearly one crore low-income clients with credit outstanding of ₹48,569 crore in Bihar, thereby playing an integral part in building an inclusive and prosperous Bihar,” MFIN said.

Mumbai Average lending rates on fresh rupee loans rose 39 basis points in January from a month earlier, latest central bank data showed, with the weighted average lending rate (WALR) increasing to 8.67%.

One basis point is a hundredth of a percentage point.

The rise from 8.28% in December was primarily driven by a 44-basis point increase in WALR by state-run banks to 8.05%, while private sector banks recorded an 18-basis point increase to 9.32%.

The Reserve Bank of India (RBI) has reduced its repo rate by 125 basis points to 5.25% over the course of 2025.

In contrast, the WALR on outstanding rupee loans of commercial banks declined marginally to 9.04% in January 2026 from 9.06% in December 2025.

The one-year median Marginal Cost of Funds-based Lending Rate (MCLR) increased to 8.45% in February 2026 from 8.40% in January 2026.
Meanwhile, the weighted average domestic term deposit rate (WADTDR) on fresh rupee term deposits stood at 5.66% in January 2026, slightly lower than 5.67% in December 2025. The WADTDR on outstanding rupee term deposits declined to 6.64% in January 2026 from 6.68% in the previous month.

Prospects for artificial intelligence to disrupt business sectors should keep the U.S. stock market on edge in the coming week, as Wall Street looks for more insight into how the emerging technology will reverberate through the economy. The monthly U.S. jobs report headlines economic data due next week, while major semiconductor player Broadcom is among the remaining reports that will close out the fourth-quarter earnings season.

The disruptive potential of AI has consumed investors in recent weeks, with shares in industries such as software, wealth management and real estate services pummeled by concerns about business upheaval.

“There continues ‌to be this…back and ⁠forth about ⁠who might be the victim and those that will actually emerge winners because they are harnessing AI as opposed to being replaced by it,” said Kristina Hooper, chief market strategist at Man Group.

“There is very little definitive right now about that, and so I think that will continue to be a concern.”

Stock prices in areas such as software remain acutely sensitive to AI-related developments. AI bellwether Nvidia’s highly anticipated quarterly report failed to calm nerves, with the semiconductor giant’s shares falling over 5% on Thursday and weighing on the technology sector. Investors are concerned about whether Nvidia’s “hyperscaler” customers will garner sufficient returns to justify their massive spending on data centers and other infrastructure.

Despite the tech sector’s struggles, gains this year in other areas such as industrials and consumer staples have helped buoy major equity indexes. The benchmark S&P 500 was up 0.9% ⁠in 2026 ‌as of Thursday.
“The U.S. equity market is sort of in its late cycle, trying to find the winners and losers of this new disruptive technology and pretty much treading water,” said John Velis, Americas macro strategist at BNY.

WILL FEBRUARY JOBS BACK JANUARY’S STRENGTH?

The U.S. jobs report for ⁠February, due on March 6, is expected to show an increase of 60,000 jobs, according to a Reuters poll. It comes after January’s surprisingly robust report, with an increase of 130,000 jobs and the unemployment rate falling to 4.3%.

The January report allayed worries about a weakening labor market, but “the concern is that January is a one-off,” said Paul Nolte, senior wealth adviser and market strategist at Murphy & Sylvest Wealth Management.

“We saw a good January jobs report, but we also have seen a really weak 2025 for the job market,” Hooper said. “And so the question becomes, where do we go from here?”

Investors will also seek clues from the report about when the Federal Reserve may next cut interest rates. Fed funds futures suggest the next reduction will come in June or July, after Fed Chair Jerome Powell’s term ends in May and his nominated replacement Kevin Warsh could be in ‌charge.

The Fed cut rates last year in the face of a weakening employment backdrop but paused the easing cycle in January, and solid jobs data could prompt investors to push back their expectations for further cuts. Investors generally associate lower interest rates with higher prices for stocks and other assets.

BNY’s Velis said the market’s reaction to the jobs ⁠data will be telling for which factors are prominent for equity investors. For example, strong data followed by weak stock performance is “going to be a sign that the rate argument is important,” Velis said.

RETAIL SALES, BROADCOM EARNINGS ALSO UP NEXT

Other economic releases due in the coming week include reports on manufacturing and services sector activity. The retail sales report for January is expected on March 6.

Aside from Broadcom’s quarterly report on Wednesday, results are expected from retailers Best Buy and Target.

Wall Street is eager for any evidence of AI’s impact on the economy, both positive and negative. In an interview with Reuters this week, outgoing Atlanta Fed President Raphael Bostic said the U.S. may be entering a period of structurally higher unemployment as firms deploy AI tools to save labor. “Major technological shifts provoke both excitement and anxiety,” Keith Lerner, chief investment officer at Truist Advisory Services, said in a research note on Thursday. “More recently… optimism has begun to give way to heightened anxiety and increasingly bleak narratives about AI’s impact on work, productivity, and economic outcomes.”