Infosys, HCL Tech, TCS tumble amid global tech selloff: Here's what's plaguing Indian IT stocks

IT stocks today: Indian IT stocks witnessed intense selling pressure on Thursday, dragging the Nifty IT index down 2.7% to an intra-day low of 27,519.15. The sector emerged among the worst performers on Dalal Street even as the benchmark Nifty 50 declined only around 0.5%.

The weakness in domestic IT shares followed a sharp selloff across global technology markets, where investors turned cautious amid concerns over rising inflation, elevated interest rates and stretched valuations in artificial intelligence-linked companies.

Among large-cap IT stocks, HCL Technologies led the decline, plunging 3.5% and becoming the biggest loser on the Nifty IT index. Infosys and LTIM also came under heavy pressure, falling around 3% each. Mid-tier technology companies were not spared either, with Mphasis and Persistent Systems dropping more than 2% each.

Tata Consultancy Services (TCS), Coforge and Tech Mahindra declined over 1.5%, while Wipro and L&T Technology Services lost around 1% during the session.

Global tech selloff triggers weakness in Indian IT stocks

The selloff in Indian IT counters mirrored weakness on Wall Street, where technology and AI-related stocks faced significant pressure overnight.

On Wednesday, the S&P 500 fell 1.6%, while the Nasdaq Composite dropped 2%. Investor sentiment turned negative after data showed that US inflation accelerated in the previous month at its fastest pace since April 2023. Although the inflation figures broadly matched market expectations, they reinforced concerns that the Federal Reserve could maintain a tighter monetary policy stance for longer.

The pressure intensified after Oracle shares plunged 8.9% in extended trading. Investors reacted negatively after the company projected fiscal 2027 capital expenditure above Wall Street estimates and announced plans to raise nearly $40 billion through a mix of debt and equity financing next year. The announcement sparked concerns over the growing debt burden being undertaken to finance large-scale AI infrastructure investments.

Meanwhile, the US dollar index remained steady at 100.03, continuing to trade within a narrow range seen over the past week. Safe-haven demand has supported the greenback, helping it remain near its strongest levels since the United States and Iran began ceasefire negotiations in early April.

Market participants are also grappling with increasing geopolitical uncertainty. Escalating tensions in the Middle East, combined with concerns about expensive technology valuations and persistent inflationary pressures, have created a challenging backdrop for risk assets globally.

Investors are now closely watching the implications of the latest US inflation data and what it could mean for future Federal Reserve policy. Many traders believe the report could offer critical clues on whether Fed Chair Kevin Warsh will be forced to keep interest rates higher for longer to contain inflation.

With global technology stocks facing mounting pressure from macroeconomic and geopolitical risks, Indian IT shares are likely to remain sensitive to developments in US markets, where a large portion of the sector's revenue originates.

Disclaimer: This story is for educational purposes only. Please consult with an investment advisor before making any investment decisions.