IT Stocks Slip As Fed’s Hawkish Outlook Weighs On Infosys, TCS And HCL Tech

Shares of major Indian information technology companies declined in early trade on June 18, dragging the Nifty lower despite gains across several domestic-focused sectors. The selloff followed losses in U.S. technology stocks after the Federal Reserve indicated that further policy tightening remains possible.

Invest in Indian Markets and Unlock Future Potential With 5paisa!

Open Account Now

At 9:16 am, the Nifty IT index was down 1.8%, making it the biggest sectoral loser on the National Stock Exchange. Infosys dropped 2.3%, while HCL Technologies fell 1.8%. Tata Consultancy Services (TCS) lost 1.3%, Tech Mahindra declined 1.3% and Wipro was lower by 0.9%.

The weakness in technology shares came after the Federal Reserve kept interest rates unchanged at 3.5%-3.75%, but its updated projections showed that nine policymakers expect at least one rate increase before the end of 2026.

Fed Chair Kevin Warsh reiterated the central bank’s focus on bringing inflation under control, prompting investors to reassess expectations for future interest-rate moves.

U.S. Technology Stocks End Lower

Wall Street’s technology-heavy Nasdaq Composite declined 1.34% overnight, while the S&P 500 lost 1.21%. Large-cap technology companies led the decline as higher interest-rate expectations reduced appetite for growth-oriented stocks.

Rising U.S. interest rates typically affect technology stocks because they increase discount rates used to value future earnings. They can also influence spending plans of global corporations, which represent a key client base for Indian software exporters.

The weakness was visible beyond frontline IT companies. On the BSE MidCap index, Mphasis fell 1.7%, while Tata Elxsi declined nearly 0.9% in early trade.

Domestic Sectors Offer Support

While IT stocks remained under pressure, several sectors linked to domestic demand traded higher. Nifty FMCG and Nifty Realty rose 0.3% each, while banking, auto and PSU banking indices also recorded gains.

The broader market remained relatively stable despite the decline in technology shares. At 9:16 am, the Sensex was down 63.62 points, or 0.08%, at 77,092.00, while the Nifty slipped 14.60 points, or 0.06%, to 24,071.10. Market breadth stayed positive, with 740 stocks advancing against 289 declines on the NSE.

Indian equities had ended higher for a fourth consecutive session on Wednesday, supported by easing geopolitical tensions, lower crude oil prices and continued institutional inflows. However, developments in U.S. monetary policy remains an important driver for the domestic IT sector given its high exposure to overseas markets and technology spending trends.