AI selloff knocks IT sector to third spot in Nifty as Oil & Gas moves ahead

The IT sector, long the second-highest weighted segment in the Nifty50 after Financial Services, has lost its position to the Oil & Gas sector in the index following a sharp selloff triggered by global concerns over AI-led disruption.

An AI product launch by Anthropic PBC last week sparked a massive selloff in global enterprise software stocks, wiping out nearly $1 trillion in market capitalisation, with the weakness expected to persist.

The tremors were felt in India, where the Nifty IT index has fallen 14.1% over the past week, erasing $52 billion in market value. As a result, the sector has slipped to third place in the Nifty50 weightings, overtaken by Oil & Gas.

According to data compiled by CNBC-TV18, the IT sector’s weight in the Nifty50 has dropped to 9.2% from 10.8% at the beginning of the month. Financial Services continues to dominate the index with a weight of 37.5%, while Oil & Gas has moved ahead of IT with a weight of 10.1%, compared with 9.9% at the start of February 2026.

Reliance Industries holds the highest weight within the Oil & Gas sector at 8.3%. In the IT pack, Infosys carries the highest weight at 4.1%, followed by Tata Consultancy Services (TCS) at 2.4%.

While most analysts acknowledge the broader disruption risk AI poses to traditional IT services revenues, opinions differ on the extent of the impact.

“Unlike the move to the Cloud, which was largely a ‘lift-and-shift’ transition that created significant incremental work for Indian IT services firms, the shift to AI presents a different set of challenges. Since the Cloud era, Indian IT has nearly doubled in size and is now the dominant incumbent rather than a challenger. While Cloud transformation primarily impacted infrastructure, AI’s impact is far more pervasive across services. Moreover, new AI-led revenue streams remain small and exploratory at t