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Indian IT stocks tumbled on Tuesday, tracking broader market weakness as concerns over global trade disruptions and a potential US economic slowdown weighed on sentiment. The Nifty IT index plunged over 2%, hitting an intra-day low of 36,797.40, making it the worst-performing sectoral index.
Major IT Stocks Take a Hit
Infosys, Tech Mahindra, L&T Technology Services, and HCL Technologies fell over 2% each.
Persistent Systems dropped nearly 3%, while LTI Mindtree lost 3.3%.
TCS dipped 1%, while Wipro slumped 2.6%.
Market experts attributed the decline to growing concerns over US tariffs and their potential impact on global trade and economic growth.
Dr. V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, warned:
“Uncertainty unleashed by Trump is aggravating global trade. If his tariff policy continues and starts impacting other countries, it will be detrimental to global trade and the global economy. India will not be spared."
Trump’s Tariffs & Market Impact
Trump’s proposed tariffs:
- 25% tariff on imports from Canada & Mexico
- 20% levy on Chinese goods
- Additional reciprocal tariffs from April 2
Analyst concerns:
- Higher tariffs could fuel US inflation, forcing the Federal Reserve to adopt a hawkish stance.
- Potential slowdown in US economic growth may lead to reduced IT spending by American firms, impacting Indian IT companies’ order flows.
Ambareesh Baliga, Independent Market Analyst, noted:
"A slowdown in the US due to these tariff issues could affect IT companies’ order flows. The uncertainty from Trump’s trade policies is an additional challenge."
Broader Market Under Pressure
- The Nifty 50 extended its losing streak, slipping toward bear market territory, down 16% from its all-time high of 26,277.
- Small-cap and mid-cap stocks suffered their worst decline since the COVID-19 crash in 2020.
- BSE Smallcap Index plunged 14% in February (steepest monthly fall since 2020).
- Nifty Midcap 100 fell 10.8%.
Vijayakumar further cautioned:
“Even Trump cannot control the markets. If tariffs drive up US inflation, the Fed may go hawkish, and the US stock market—currently at record highs—could see a severe correction or even a crash. This might force Trump to reassess his policies."
Indian Markets Continue Losing Streak
- On Monday, the Nifty closed below 22,120, marking nine straight losing sessions—the longest since 2019.
- Optimism from Salesforce’s 7%-8% growth forecast for FY26, which briefly lifted IT stocks on Monday, was wiped out as renewed trade war fears rattled markets.
What’s Next?
- Investors will closely monitor US economic data and the Federal Reserve’s stance.
- The IT sector could remain volatile as trade tensions unfold.
- Markets may react sharply if Trump’s tariff policies escalate into a full-blown trade war.
For now, caution remains the key word for IT investors amid global uncertainty.
