The tech stocks are under pressure today, with most counters down over 1% in intraday trade. The Nifty IT fell as much as 1.7%. All 10 constituents of the Nifty IT index were trading in the red. Oracle saw the maximum hit, followed by Coforge, HCL Technologies, LTI Mindtree, Wipro, and many others. Coforge’s stock price hit an intra-day low of Rs 1,715.

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Why are tech stocks falling? – 3 reasons

1. The big AI worry: The AI bubble losing steam in the US is seen as a key reason for the selling pressure across the tech sector. Ajit Mishra, Senior Vice President of Research at Religare Broking, said that “the recent fall in the US markets due to the AI bubble losing some steam on the back of high valuations may have impacted the Indian IT stocks. However, the Indian IT companies are more service-based, but still dependent in a way on AI-related companies.”

In a separate report, Kotak Institutional Equities highlighted that “the correction in global markets and AI stocks in the past few days may or may not mark the end of the AI bubble (good, bad or ugly, only time will tell). Nonetheless, the sharp increase in the market capitalisation of all sorts of AI plays  in various ‘AI-heavy’ markets would imply mind-boggling AI-related revenue and profit pools for AI companies.”

2. Dollar Strengthens: The US dollar has been hovering well over the 99 mark and close to 100 levels. This is near the highs seen earlier in 2025. The Dollar Index hit a high of 110 in January this year before slipping all the way to 96. The Index has again started trending higher, up nearly 2% in the last 3 month

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3. The impact of FII selling: A significant feature of the present market trend is that despite the DIIs buying far more than what the FIIs are selling (Rs 5283 crore DII buying vs Rs 3263 crore FII selling yesterday), the market continues to drift down. 

VK Vijayakumar, Chief Investment Strategist, Geojit Investments, said, “The huge shorting by FIIs is overpowering the DII and investor buying in the market. The success of the FII strategy of sustained selling in India and moving money to cheaper markets has emboldened them to continue the strategy and continue shorting the market. Short covering can lead to trend reversal, but there are no immediate triggers for that in sight.  But markets have an uncanny ability to surprise.”