Indian IT stocks took a sharp nosedive on Wednesday, with the Nifty IT index plummeting 3.59 per cent to 36,057.50 around 11.15 am, as worries about a possible US recession and trade tensions between the US and Canada shook global markets.
The decline was spearheaded by Wipro and Infosys, which saw drops of 5.22 per cent and 5.15 per cent respectively. Other prominent IT companies also recorded significant losses, with LTTS down 3.70 per cent, LTIM falling 3.65 per cent, and HCL Technologies declining 3.46 per cent. TCS, India’s largest IT company, fell 1.97 per cent to trade at ₹3,505.
The sell-off is being attributed to mounting recession concerns in the United States, which serves as the largest market for Indian IT service providers. Recent economic indicators from the US have contradicted earlier expectations of GDP growth improvement, sparking fears about the state of the world’s biggest economy.
Kranthi Bathini, Director of Equity Strategy at WealthMills Securities, commented, “This is because of US recession worries and the tremors taking place in US markets. Trade tensions rose to an all-time high amidst tariff jitters and conflicting news which added to the volatility in the global markets.”
The downturn in US tech stocks is directly impacting Indian IT companies, whose prosperity is closely linked to technology spending in North America. The sector has now witnessed a 12.86 per cent decline over the past 30 days, with companies like LTIM and Mphasis registering losses of 21.86 per cent and 20.59 per cent respectively during this period.
Investors are now eagerly awaiting India’s CPI and industrial production data scheduled for release later today, with forecasts anticipating inflation at 4.1 per cent and industrial growth at 3 per cent.
