IT sell-off impact: Prestige Estates, other real estate shares decline up to 6%, realty index down 4%

Realty shares see profit booking in trade. 

• Realty stocks fell up to 6 percent, tracking IT sector weakness.
• Nifty realty index dropped 4 percent; only Signatureglobal gained.
• IT sector concerns over AI automation impact realty demand.

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Shares of real estate firms declined on Friday in line with weakness in information technology (IT) stocks, with Prestige Estates Projects Ltd, DLF and Godrej Properties among the major laggards.

The sectoral realty index declined about 4 percent during the session, while select stocks dropped up to 6 percent. In the previous session on Thursday, the index had fallen up to 1.5 percent.

In the Nifty realty index, nine out of 10 constituents traded in the red, barring Signatureglobal (India), which rose about 5 percent.

The selling in realty shares comes amid a sharp sell-off in IT stocks this week. Concerns over disruption from artificial intelligence-driven automation have weighed on IT companies, putting the sector on track for its worst performance since March 2020, when markets declined following COVID-19 lockdown announcements.

Weakness in IT stocks has raised concerns about employment prospects in the sector. The IT workforce forms a key buyer base for urban housing, and fears of a hiring slowdown or job losses could affect demand for residential properties, leading to pressure on realty shares.

The IT index has declined 11.4 percent this week and is down 16.6 percent so far in 2026, exceeding the 12.6 percent fall recorded in the whole of last year.

Analysts said AI could accelerate automation of routine work and shorten delivery timelines, putting pressure on the traditional headcount-based outsourcing model for IT firms in India. Growing AI adoption could also affect new deals and revenue growth.

"Waning expectations of a near-term US rate cut and evolving concerns over potential disruptions from AI are intensifying the sell-off in IT stocks, hurting market sentiment," Bajaj Broking Research said.

Sunny Agrawal, head of fundamental research at SBI Securities, said the IT sector has been under pressure over the past year due to macroeconomic concerns, tariff uncertainties, geopolitical tensions and weak discretionary spending.

He added that investors are concerned AI technologies may automate complex tasks across functional areas, affecting traditional IT services and outsourcing business models, while competition from AI-led start-ups could also impact market share.

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