IT Stocks Fall As Nifty IT Slips 1.50% Amid U.S.-Iran Tensions And U.S. Tech Sell-Off

Indian IT stocks traded lower in early deals on February 20, tracking weakness in U.S. software stocks and rising geopolitical tensions in West Asia. According to NSE data, the Nifty IT index was down around 1.50% by 9:30 AM, with heavyweights witnessing selling pressure soon after the opening bell.

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Shares of Infosys, Wipro, TCS, and HCL Technologies were among the major laggards in the IT pack in early trade. Other technology counters, including Firstsource Solutions, also saw declines.

U.S. Software Sell-Off Weighs On Indian IT Counters

The weakness followed a sell-off in U.S.-listed technology and software stocks during the previous session. Infosys ADR, Wipro ADR, Globant, EPAM, Cognizant, and Accenture witnessed selling pressure in the U.S. market on Thursday, according to market data cited in the report.

As per reports, part of the pressure concerns around artificial intelligence-linked stocks, which have seen volatility in recent sessions. The report noted that the recent surge in U.S. and Indian IT stocks had coincided with heightened geopolitical developments in West Asia.

Escalating U.S.-Iran Tensions Add To Risk Aversion

Geopolitical developments also weighed on sentiment. A military buildup, including warships, fighter jets, and refuelling aircraft, has been reported in West Asia amid tensions between the U.S. and Iran. According to CNN and CBS, the U.S. military is prepared for potential strikes against Iran, though no final decision has been announced.

The region remains in tension, and Russia and Iran have engaged in some naval exercises in the Sea of Oman, reported by Reuters. The market members mentioned such developments as a source of a risk-off environment in the world equities. 

Currency And Crude Concerns In Focus

According to the exchange data, India VIX has increased to 13.46 by over 10%, and this is an indicator of increased volatility in the domestic market. The activity of investors was concentrated on the institutional flows in the cash segment.

Geopolitical tensions were observed in monitoring crude oil prices because India imports much of its oil needs. The moves of the currency were also of interest, with the Indian rupee exchanging with the U.S. dollar throughout the session.

Indian IT shares fell at the start of trade on February 20, as the Nifty IT index fell 1.50%, as the U.S. software shares were falling, and U.S.-Iran geopolitical tensions were increasing.