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Indian IT stocks were trading lower in early trades on Tuesday, following broader market weakness
IT Stocks Decline
Indian IT stocks were trading lower in early trades on Tuesday, following broader market weakness. As a result, the Nifty IT index became the biggest laggard among sectoral indices, falling more than 2% and hitting an intra-day low of 36,797.40.
Major IT players such as Infosys, Tech Mahindra, L&T Technology Services, and HCL Technologies all saw declines of more than 2%. Shares of Persistent Systems dropped by up to 3%, while LTI Mindtree fell 3.3%. TCS declined nearly 1%, and Wipro lost 2.6%, as investors braced for potential impacts of higher tariffs on global trade and economic growth.
Market analysts pointed to the weakness in the US economy as a key factor affecting IT stocks, with concerns about a slowdown due to tariff threats and their potential to impact inflation and economic growth in the US.
Dr. V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, stated, “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.”
President Trump’s proposed 25% tariffs on goods from Canada and Mexico, along with a 20% levy on China, were set to take effect at 10:31 a.m. IST on Tuesday. The US president also announced reciprocal tariffs starting April 2, adding to concerns about prolonged trade tensions. Analysts warned that these higher tariffs could fuel inflation in the US, leading to tighter monetary policies and potentially dampening capital flows into emerging markets like India.
Independent market analyst Ambareesh Baliga noted, “One reason for the pressure on IT stocks is the expected slowdown in the US due to these tariff issues. A slowdown could affect the order flows for IT companies.” He added that Trump’s tariff threats bring an additional layer of uncertainty for IT companies.
The IT sector’s decline came after a brief reprieve on Monday, when the index gained 0.8%, breaking a seven-day losing streak. Optimism had briefly returned after Salesforce projected 7%-8% growth for fiscal 2026, sparking hopes for stronger demand in the global tech sector. However, the relief was short-lived as renewed trade fears rattled the markets.
The broader Indian market continued its downward trend, with the Nifty 50 slipping further toward bear market territory. The benchmark index has fallen nearly 16% from its all-time high of 26,277. Meanwhile, small-cap and mid-cap stocks suffered their worst decline since the COVID-19 market meltdown of 2020. The BSE Smallcap index plunged 14% in February, marking its steepest monthly drop since the pandemic crash, while the Nifty Midcap 100 fell 10.8%.
Vijayakumar also commented, “Even mighty Trump cannot influence markets. Tariffs will soon drive up inflation in the US, and the Fed may adopt a hawkish stance. The US stock market, which is now priced to perfection, could face a severe correction—or even a crash. This outcome, which Trump fears, could force him to reassess his policies.”
On Monday, the Nifty closed below 22,120, extending its losing streak to nine consecutive sessions, the longest since 2019, as global trade concerns continued to weigh heavily on investor sentiment.
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