IT Stocks Slide as Nifty IT Index Declines for Fourth Day; Persistent, TCS, Infosys Lead Losses

On September 5, Indian IT shares experienced notable declines, with Persistent Systems, Mphasis, and Tata Consultancy Services (TCS) among the worst hit. The Nifty IT index fell for the fourth consecutive session, reflecting investor caution amid a mix of weak U.S. economic data, disappointing global IT earnings, and rising geopolitical concerns.

Nifty IT Index Falls for Fourth Consecutive Day

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Persistent Systems dropped by 3.07% to ₹5,131.00 per share, while Mphasis and TCS declined 2.15% and 1.54%, respectively. Coforge shares were down 1.86%. The Nifty IT index was down by 1.44% at 34,635.85 points by 3:30 pm. Analysts noted that seven out of the past eight sessions saw the index in the red, despite market expectations of a quarter-point rate cut by the U.S. Federal Reserve on September 17 and a total of 60 basis points of reductions anticipated this year.

U.S. Economic Data and Earnings Pressure Weigh on IT Stocks

A major factor behind the decline was weaker-than-expected U.S. labour data. Private payrolls in August fell short of forecasts, and weekly jobless claims were higher than anticipated, raising concerns over the U.S. economic growth outlook. Since Indian IT firms derive a significant portion of revenue from the U.S., investors reacted negatively, pushing stock prices lower despite initial gains earlier in the session.

Geopolitical Concerns Add to Market Caution

Further pressure came from geopolitical developments. White House trade advisor Peter Navarro reposted a message on X from commentator Jack Posobiec, advocating tariffs on outsourced remote work. Posobiec argued that foreign service providers should pay for offering services to the U.S., similar to goods, a message amplified by Navarro amid ongoing debates about tariffs on Indian goods. While reports suggested potential tariffs on India’s IT sector, Bloomberg later clarified that no formal announcements had been made.

Adding to market caution were disappointing results from U.K.-based IT company Endava. Its fourth-quarter earnings fell short of expectations, and it projected a constant-currency revenue decline of 5–6% in the first quarter. Market watchers also highlighted that rapid developments in artificial intelligence are causing clients to defer large IT spending, slowing deal conversions and impacting revenue growth.

The combined effect of subdued U.S. economic data, global IT earnings pressure, and geopolitical uncertainties has contributed to the ongoing weakness in Indian IT shares, signalling a cautious sentiment among investors.

Conclusion

Indian IT stocks face a challenging environment as macroeconomic factors, sector-specific earnings, and potential trade policies weigh on investor sentiment. While valuations remain attractive, sustained uncertainty in the U.S. and evolving AI adoption trends could keep the sector under pressure in the near term.