IT Stocks Slide As Global Technology Rout Weighs On Sector Sentiment

Stocks of leading IT firms in India came under pressure on Thursday with the Nifty IT index falling by nearly 2.7% intra-day due to losses being witnessed in the global tech sector owing to worries over inflation, interest rates, and spending on AI infrastructure.

Nifty IT index witnessed an intra-day fall to 27,519.15, while the wider Nifty 50 index was down by only around 0.5%. Technology stocks suffered heavy losses in comparison to the rest of the sectors.

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HCL Technologies emerged as the biggest laggard among frontline IT stocks, falling 3.5%. Infosys and LTIMindtree also lost around 3% each. Mphasis and Persistent Systems declined more than 2%, reflecting weakness across the sector.

Tata Consultancy Services (TCS), Coforge and Tech Mahindra fell over 1.5%, while Wipro and L&T Technology Services traded lower by about 1%.

Global Technology Stocks Trigger Selloff

The decline in Indian IT shares tracked overnight losses in U.S. technology stocks. Wall Street witnessed sharp weakness after inflation data reinforced expectations that interest rates could remain elevated for longer.

The Nasdaq Composite ended 2% lower, while the S&P 500 lost 1.6% in the previous session. Investors reassessed valuations across technology and AI-linked companies as borrowing costs and funding requirements remained key concerns.

Additional pressure came from software company Oracle, whose shares dropped 8.9% in extended trading. The company projected higher capital expenditure for fiscal 2027 and indicated plans to raise nearly $40 billion through debt and equity financing. The announcement renewed concerns about the cost of expanding AI-related infrastructure.

Inflation And Geopolitical Risks Remain In Focus

The market players were also paying attention to the situation in the Middle East. Tensions in the Middle East have caused the price of crude oil to rise and have become another factor that can raise inflation expectations in advanced economies.

The U.S. dollar was trading near 100 levels on currency charts. It’s been the demand for safe-haven currencies like the dollar that has been driving its performance recently.

Due to high energy prices and worries about inflation and tightening, investors are reducing their exposure to risk-on tech shares around the world.

Outlook For Indian IT Shares

Indian IT companies derive a substantial share of their revenue from North America, making them sensitive to economic developments in the U.S. market. Movements in the technology stocks around the world and in inflation and the policies of the U.S. Federal Reserve will continue to impact investor attitudes towards the stocks.

With doubts regarding the future interest rate movements and economic growth, the technology stocks are expected to remain linked to foreign market events in the short term.