Bearish bets on local IT counters surge as AI fears spook investors

Mumbai: Traders have ramped up bearish derivative bets on India’s IT sector to the highest levels in recent times, as global AI-related developments have raised questions over the prospects of software exporters and triggered a sharp risk-off sentiment in the sector.

While most IT stock futures are seeing their biggest position build-up in 2026, bearish wagers in Infosys, Coforge and Persistent Systems are at their highest levels on record, according to SBI Securities.

The Nifty IT index is down over 17% since February 3 after San Francisco-based AI company Anthropic announced the launch of its new automation tool, Claude Cowork, a move that intensified fears of the growth trajectories of software companies.

Open interest (OI) or outstanding positions in large-cap IT stock futures has risen 39% as of February 20, compared with the average cumulative open interest between January 1, 2024 and January 31, 2026, according to SBI Securities. The increase in the case of mid-cap IT contracts stands at 70%.

“The massive rise in OI when read with the sharp fall in stock prices implies extreme short-build up in IT Stocks,” said Sudeep Shah, head – Technical and Derivative Research, SBI Securities.

The extent of the rollovers in IT stock futures to March when NSE’s February contracts expire on Tuesday will give analysts a clearer picture of how traders are positioning themselves in the near term.

“If rollovers approach previous levels in the remaining two sessions, it will indicate a significant rollover of short positions,” said Rajesh Palviya, head of Technical and Derivatives Research at Axis Securities. The rollover of positions to the March series stood at 67% as of Friday, compared with 96% in the previous expiry. Infosys has seen rollovers of 74.6% against 89.4% in the previous series, while that in TCS stands at 65.6% versus 96.4% in the February series. The nervousness around the IT stocks is palpable with the Nifty IT index closing lower on 10 out of 16 trading sessions in February. Shares of IT stocks have declined between 11% and 19% so far this month. Coforge is down nearly 19%, while LTIMindtree and Infosys have dropped about 18% each.A combined reading of derivative indicators signals absence of investor interest in these stocks. “On days when IT stocks attempted to recover, Open Interest did not rise significantly. This tells us that most upside moves were driven by short covering rather than fresh buying interest, or in other words, traders have not yet shown strong conviction to build new long positions,” said Dhupesh Dhameja, derivatives analyst at Samco Securities. Dhameja said sentiment remains cautious ahead of the monthly expiry. “The options data shows noticeable call writing at near-term resistance levels, which suggests that traders expect limited upside in the immediate term.

Put writing has been seen at lower levels, but this appears more defensive and hedged in nature rather than aggressive bullish positioning,” he said. Shah advised against trying to time purchases in IT stocks as their technical structure remains weak for now. “It is prudent to wait for the IT index to stabilise and for clear signs of strong buying interest before planning fresh exposure,” he said.