India’s technology stocks continue to be the spotlight. Though off the early lows, the selling pressure is still there. The Nifty IT index slipped 1% in opening trade before retracing some ground. Most stocks in the IT index are trading in the red in the early trading hours, though off moning lows.
The fall comes at a time when global cues remain fragile. For investors tracking IT stocks, both domestic and global developments are playing a role in shaping sentiment.
Let’s take a look at the key reason why this sector is in the limelight today –
Broad-based selling across IT majors
The weakness was visible across large-cap and midcap IT names. Persistent Systems and Infosys were among the key laggards in early trade, each declining over 1%.
Coforge, Mphasis and Wipro were also under pressure, trading about 1% lower.
Other major IT names including LTI Mindtree, Tech Mahindra, HCL Technologies, Tata Consultancy Services (TCS) and Oracle Financial Services Software are now in the positive territory or flat, after recouping from the early decline.
Indian tech ADRs fall in US trade
The pressure across Indian IT sector follows a sharp sell-off in US-listed technology and IT services companies. American Depository Receipts (ADRs) of major Indian IT firms saw declines overnight. Infosys ADR fell 3.3%, while Wipro ADR declined 2.6%.
US-listed IT stocks
Its not just ADRs, seveal US listed IT stocks also saw sharp selloff. Globant dropped 7.3%, EPAM Systems plunged 17%, Cognizant slipped 2.7% and Accenture fell 3.8%. Such steep corrections in global peers often influence sentiment back home, especially since Indian IT companies derive a significant portion of their revenue from overseas markets, particularly the United States.
US tech heavyweights add to the pressure
The broader US technology market also showed signs of weakness. Nvidia and Apple both declined about 1% and were among the biggest drags on the S&P 500 index.
Concerns of growing AI tools
Investors are also questioning whether the massive investments being made in AI infrastructure and tools are translating into strong revenue and profit growth. While companies continue to highlight AI opportunities, markets are increasingly demanding clear earnings visibility.
At the same time, there are concerns that rapidly improving AI tools could disrupt traditional business models across industries ranging from software to logistics. This uncertainty has added another layer of caution for investors.
Geopolitical tensions weigh on sentiment
Adding to the uncertainty are geopolitical tensions. As Dr. VK Vijayakumar, Chief Investment Strategist, Geojit Investments, explained, “The sharp spike in Brent crude to $72 reflects growing fear and uncertainty in markets. President Trump’s warning that “Iran has 10 to 15 days to strike a deal or bad things happen “ has put the markets on tender hooks. Whether there will be a deal after the standoff, or whether missiles will fly will determine the market behaviour in the near-term. The continuing weakness in IT stocks is another dampener for the market.”