Indian IT Stocks Slide as Trump’s Tariff Uncertainty Sparks Market Sell-Off

Infosys, Wipro, Tech Mahindra Among Top Losers; Nifty IT Index Drops Over 1.5%

Indian information technology (IT) stocks suffered sharp declines on March 11, with Infosys, Wipro, Tech Mahindra, and Mphasis among the worst hit. The Nifty IT Index slumped over 1.5%, marking its fourth consecutive day of losses. The sell-off comes amid growing uncertainty over U.S. trade policies under President Donald Trump, whose tariff threats have rattled global markets and raised concerns about potential disruptions to India’s export-oriented IT sector.

Trump’s Tariffs Fuel Market Volatility, Dampening IT Growth Prospects

The downturn in IT stocks is primarily driven by fears that Trump’s aggressive trade policies could derail U.S. economic growth, impacting outsourcing demand for Indian tech firms. Indian IT companies derive a significant portion of their revenue from the U.S., making them particularly vulnerable to any economic slowdown or protectionist policies.

• Overnight, Wall Street experienced a massive sell-off, with major indices posting heavy losses:
  • Dow Jones Industrial Average fell 2.1%
  • S&P 500 dropped 2.7%
  • Nasdaq Composite plunged 4%

Market participants fear that reciprocal tariffs from the U.S. could be imposed on Indian exports as early as April, impacting multiple sectors, including technology and software services.

Infosys, Wipro, and Mphasis Lead Declines as Selling Pressure Mounts

At 9:40 AM, leading IT stocks were among the biggest losers on the Nifty 50 and Nifty IT indices:

• Infosys (-2.8%)
• Wipro (-3.2%)
• Tech Mahindra (-2.5%)
• Mphasis (-2.9%)
• Coforge (-2.6%)
• L&T Technology Services (-2.3%)

With growing concerns over U.S. trade policies, investor sentiment in the IT sector remains fragile, pushing stocks lower.

Market Analysts Expect Further Weakness in Indian IT Stocks

Several market experts and analysts have warned of continued volatility in IT stocks amid a challenging macroeconomic environment.

• V.K. Vijayakumar, Chief Investment Strategist at Geojit Financial Services, stated:

  “Uncertainty unleashed by Trump’s tariffs is reigning supreme now, and this is weighing heavily on the market. Consequently, trading volumes have dipped sharply, and investor sentiment remains fragile.”

• Analysts fear that Indian IT firms could face weaker order flows and lower outsourcing demand if the U.S. economy slows down further.

• Moreover, with high inflation and interest rate concerns already affecting corporate spending, many U.S. clients of Indian IT firms may cut back on technology budgets, impacting revenue growth.

U.S. Trade Policy Adds to Worries Over IT Sector’s Growth Outlook

The broader Indian stock market has been under pressure amid escalating global uncertainties. Investors are wary of Trump’s “America First” policies, which include tariff hikes and stricter visa regulations that could affect Indian IT companies relying on U.S. talent visas like the H-1B program.

Further complicating matters, Trump’s latest government restructuring efforts, which include firing key officials and introducing new trade barriers, have injected additional uncertainty into global markets.

• IT firms, which rely on cross-border service contracts, could see longer project approval cycles and budget cuts as businesses in the U.S. adopt a wait-and-watch approach.
• A prolonged downturn in tech spending could lead to muted earnings growth for Indian IT companies in the upcoming quarters.