The IT stocks are under severe selling pressure in today’s trade. The Nifty IT declined over 2%, falling the most among the sectoral indices. All the constituents of Nifty IT were trading in the red. The share price of Insoys fell the most in Nifty IT, cracking as much as 3.5% to an intra-day low. It was followed by HCL Technologies, Wipro, Persistent Systems, Tech Mahindra, and others, all falling over 2% apiece.
The global brokerage firm, HSBC, said that IT is no longer a long-term double-digit compounding sector, with the long-term stock return trajectory gradient lower than in the past. “We also expect stocks to be a lot more cyclical around this mean path. Hence, top-tier IT stocks require a lot more active management around their cycles/volatility. With a possible cyclical rebound in 2026 or FY27, IT stocks could have further to run on top of recent performance, in our view,” it said.
4 reasons why tech stocks are falling today
There are many factors that have led to the fall in Indian tech stocks. However, we’ve narrowed down the 4 most important and relevant factors below.
Jefferies on IT sector
In FY27, the brokerage house expects growth to improve slightly to 4.7% YoY – in constant currency terms – but remain below trend levels due to geopolitical uncertainty and AI-led drag. However, favourable forex and limited hiring should help preserve margins.
Jefferies is of the view that valuations are unlikely to re-rate given risks to consensus revenue growth expectations. Mid-sized IT names are preferred, given higher earnings growth with Coforge, Sagility India, IKS (upgraded to Buy), and MPhasiS among top picks. The brokerage also prefers Infosys and HCLTech among large IT names.
Trump warns of raising tariffs further
U.S. President Donald Trump has warned India that Washington could once again raise tariffs on Indian imports if India fails to cooperate on the “Russian oil issue”, as per news reports. However, no details of a direct call were officially disclosed. “We could raise tariffs on India if they don’t help on the Russian oil issue,” Trump was quoted. The US in 2025 doubled import tariffs on Indian goods to 50% as punishment for India’s heavy buying of Russian oil.
Rupee remains under pressure
The uncertainty with regard to the US-India trade deal and what it means in terms of tariff burden for India is also keeping the rupee on edge. The Indian rupee inched lower on pressured demand for dollars. The currency is headed for its ninth daily decline in ten sessions, falling from 89.25 to near the current levels. Sentiment has soured further on that front after US President Donald Trump warned of higher tariffs on India over Russian oil purchases.
America attacked Venezuela
Another reason could be the geopolitical tension that has erupted after the US attacked Venezuela and captured its President, Nicolas Maduro, and his wife. However, Washington called it an arrest of “two indicted fugitives” on narcotrafficking charges. Nonetheless, Donald Trump, within hours, openly talked about controlling the oil-rich country and its oil business.
The IT companies are readying for the Q3 results next week. All eyes would be on the guidance for FY26 and the revenue outlook for the upcoming fiscal year.