Anthropic’s AI Shockwave: Why Indian Tech’s 6% Crash Could Be the Canary for Global Labor

If you’re still clinging to the notion that tech is the world’s only growth engine, the past 24 hours have been a rude awakening. The real story isn’t just a $285 billion global software rout or some Nasdaq points vaporizing on a Tuesday night. It’s the brutal, algorithmic culling of Indian IT exporters, down a bruising 6%, after Anthropic’s new AI automation tool landed like a neutron bomb on global staffing models. This is not your garden-variety risk-off move. It’s a regime shift, and the market’s message is clear: labor arbitrage is dead money in a world where AI can do the job for free, instantly, and at scale.

Let’s get the facts straight. At 09:00 UTC on February 4, 2026, Indian tech stocks were still reeling from the previous session’s carnage. Reuters reported the sector’s sharpest single-day drop in over two years, triggered by Anthropic’s AI tool launch. The selloff wasn’t just local. Software, financial services, and asset management stocks across the globe were swept into the downdraft, with the CNN Money Fear and Greed Index lurching into “Fear” territory. The rotation was swift and merciless. Traders dumped anything with a headcount and a spreadsheet, and the old “offshore advantage” narrative was left for dead.

The cross-asset context is ugly for anyone still long labor-intensive tech. US indices are diverging: the Dow and S&P 500 are seeing defensive inflows, while the Nasdaq and global software ETFs are bleeding. The yen’s weakness is propping up risk sentiment in some corners, but the macro backdrop is shifting. We’re seeing the first real test of the AI labor thesis, can you justify a 20x multiple for a body shop when the bodies are about to be replaced by code? The answer, at least for now, is a resounding no.

Historical comparisons are instructive. Remember the 2016-2018 “automation scare” that sent Indian IT stocks down 18% in six months? This time, the velocity is higher and the narrative is more existential. In 2018, the market eventually realized that RPA (robotic process automation) was mostly PowerPoint and vaporware. But Anthropic’s tool is real, and it’s already being piloted by major US and European banks. The feedback from the buy side is brutal: “If this works, why do we need 40,000 coders in Bangalore?”

The macro backdrop is not helping. Global deleveraging, persistent inflation, and a US Fed that is still more hawkish than dovish. The market is sniffing out a regime where cost-cutting trumps revenue growth, and the first to go are the labor-heavy, margin-thin exporters. Add in the fact that India’s rupee has been relatively strong (making exports less competitive), and you have a perfect storm.

What’s really going on here? The selloff is not just about Anthropic’s tech. It’s about the sudden, collective realization that the “human capital” story is now a liability, not an asset. Indian IT’s entire business model, cheap, scalable labor, has been commoditized by AI. The market is repricing risk, and it’s not waiting for the earnings misses to show up. This is anticipatory selling, and it’s being driven by institutional money that has seen this movie before.

The rotation is also about opportunity cost. Why own a company with 10% top-line growth and 15% margins when you can buy a US hardware manufacturer with pricing power and zero exposure to wage inflation? The flows are telling the story: out of software, into anything that makes a physical product or owns a patent. The old “tech is tech” trade is dead. Now it’s “AI is the product, not the service.”

Strykr Watch

Technically, the Indian IT index is sitting just above its 200-week moving average, a level that has held in every major drawdown since 2013. RSI is at 31, the lowest since the pandemic crash. Volume on the selloff was 2.4x the 20-day average, signaling institutional capitulation. If the index breaks below this level, the next support isn’t until 12% lower, a level last seen in 2022. Watch for failed bounces: any rally that stalls below the 50-day moving average is a short setup. On the US side, keep an eye on the global software ETF, which is flirting with a breakdown of its own. If it closes below last week’s low, the dominoes will keep falling.

The risk case is simple: if Anthropic’s tool gets regulatory pushback or fails to scale, the panic could reverse. But the market is not pricing in a false alarm. The threat level is high, and the technicals are ugly.

The opportunity? For traders with a strong stomach, shorting failed rallies in Indian tech or global software is the obvious play. The risk-reward is asymmetric: stops are tight, and the downside is open-ended if the AI narrative keeps gaining steam. For the more contrarian, a flush below the 200-week moving average could be a place to start scaling in for a bounce, but only with tight stops and small size.

Strykr Take

This isn’t just a tech story. It’s a labor story, a macro story, and a regime shift all rolled into one. The market is telling you that the old playbook is dead. If you’re still long labor-intensive tech, you’re fighting the tape and the narrative. The Strykr Pulse says stay defensive, stay nimble, and don’t try to catch a falling knife. The AI labor shock is real, and it’s not done yet.