Finance and Economy NewsStock Market News Indian IT Stocks Decline as Dollar Weakness and Nasdaq Correction Weigh on Sentiment Last updated: May 22, 2025 11:52 am Author- Sourabh Sharma Share 4 Min Read Indian IT Stocks Decline as Dollar Weakness and Nasdaq Correction SHARE Nifty IT Drops as Trade War Uncertainty and Weak Dollar Impact Sector Indian IT stocks came under selling pressure on March 7, with the Nifty IT index snapping a two-day gaining streak amid global market turbulence. The Nasdaq Composite’s sharp 3% decline overnight, coupled with a weakening U.S. dollar and concerns over new tariff measures proposed by former U.S. President Donald Trump, weighed heavily on investor sentiment.ContentsNifty IT Drops as Trade War Uncertainty and Weak Dollar Impact SectorWhy Indian IT Stocks Are Under Pressure1. U.S. Tariff Concerns and Impact on IT Companies2. Weakening U.S. Dollar Adds to Worries3. Nasdaq’s Steep Decline Signals Caution for Tech StocksIT Stocks React: Nifty IT Index Down Over 1%Investor Outlook: Short-Term Volatility Likely, Long-Term Fundamentals IntactIndian IT Faces Pressure but Long-Term Growth Drivers Intact The broader Indian stock market saw IT heavyweights such as Infosys, LTI Mindtree, HCL Tech, and Wipro trading lower, as uncertainty loomed over the sector’s earnings outlook. Why Indian IT Stocks Are Under Pressure 1. U.S. Tariff Concerns and Impact on IT Companies Former U.S. President Donald Trump announced plans for reciprocal tariffs on key trading partners, including India, effective April 2. The policy move raises concerns over potential disruptions in trade agreements, which could impact Indian IT firms that generate a large portion of their revenue from the U.S. market. While auto industry tariffs on Mexico have been delayed for a month, Indian exporters, particularly in IT and pharma, remain at risk. 2. Weakening U.S. Dollar Adds to Worries The U.S. dollar index has recorded its longest losing streak since September 2023, leading to sudden strength in the Indian rupee. A stronger rupee reduces the export earnings of Indian IT companies, making their services less competitive in global markets. 3. Nasdaq’s Steep Decline Signals Caution for Tech Stocks The Nasdaq Composite dropped nearly 3% overnight, officially entering a correction phase. The correction in U.S. tech stocks often reflects risk-off sentiment, which can spill over into Indian IT firms that derive a significant portion of revenue from U.S. clients. IT Stocks React: Nifty IT Index Down Over 1% Mphasis emerged as the biggest loser, falling nearly 2% to ₹2,300 per share. LTI Mindtree and Infosys declined over 1% in early trading. L&T Technology Services, HCL Technologies, Tech Mahindra, TCS, and Wipro also saw marginal losses. Persistent Systems bucked the trend, trading in positive territory, as investors sought selective buying opportunities. Investor Outlook: Short-Term Volatility Likely, Long-Term Fundamentals Intact Despite the current headwinds, analysts remain optimistic about Indian IT companies in the long term, citing: Strong order pipelines and digital transformation deals. Continued demand for cloud computing, AI, and automation services. Growing presence in Europe and APAC regions, reducing reliance on the U.S. market. However, near-term volatility may persist, as investors assess the impact of a weaker U.S. dollar, tariff uncertainties, and global tech stock movements. Indian IT Faces Pressure but Long-Term Growth Drivers Intact The sell-off in Indian IT stocks reflects global macroeconomic concerns and investor caution amid U.S. policy uncertainty. While near-term challenges remain, long-term fundamentals for the sector remain robust, driven by digital transformation and cloud adoption. Investors will closely monitor further U.S. policy developments, currency fluctuations, and global tech earnings before making investment decisions in the sector. You Might Also Like AICPDF Declares Indefinite Boycott of Turkish FMCG Products Across India TVS Motor Q4 Net Profit Soars 76%, Revenue Rises 17% Nifty Tops 25,500, Sensex Rises; TVS Motor Sales and IPO Buzz Drive Market Sentiment Sun Pharma Gets US Legal Nod to Launch Leqselvi Demat Account Growth Hits 21-Month Low Amid Market Volatility and Regulatory Changes Share This Article Facebook Copy Link Previous Article Suzlon Shares Surge 9%, Marking Biggest Single-Day Gain in 20 Months Next Article Jana Small Finance Bank Soars 12% as RBI Grants AD-I License for Forex Operations Leave a Comment Leave a Reply Cancel replyYour email address will not be published. Required fields are marked *Comment * Name * Email * Website Save my name, email, and website in this browser for the next time I comment. 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