Indian IT stocks remain under pressure as investor worries over US discretionary spending persist, pushing the Nifty IT index deeper into bear market territory.

Nifty IT Index Declines for Fifth Straight Session

The Nifty IT index continued its downward spiral for the fifth consecutive session, hovering around 36,176.10 as IT stocks traded in the red. Despite a broader market recovery, the IT sector lagged behind, reflecting ongoing investor concerns over weak discretionary spending by US-based clients.

Bear Market Territory: The Nifty IT index has now slipped into bear market territory, following a sharp decline in the previous session.
Heavy Selling Pressure: Shares of L&T Technology Services were the top losers, falling nearly 1.3% to trade at Rs 4,334 per share.
Other Major Declines: Coforge and Wipro also experienced significant losses, with Coforge trading at Rs 7,318 per share and Wipro at Rs 266 per share, both declining over 1%.

Infosys Leads IT Sector Decline Amid Brokerage Downgrades

Infosys, a heavyweight in the IT sector, was one of the biggest drags on the index.

Stock Performance: Infosys shares declined nearly 1% on Thursday, trading at Rs 1,577 per share.
Sharp Drop Earlier: The IT major had previously slumped nearly 5% on March 12, marking its lowest level since July 2024, following a series of downgrades by top brokerage firms.
Brokerage Downgrades:
- Motilal Oswal Financial Services downgraded Infosys to ‘Neutral’ due to weakening demand.
- Morgan Stanley lowered its rating to ‘Equal Weight’ and slashed its target price from Rs 2,150 to Rs 1,740 per share.

The fall in Infosys stock was the biggest contributor to the downturn in the Nifty IT index.

Other IT Giants Struggle

The broader IT sector also witnessed continued weakness, with several key players facing marginal declines:

Persistent Systems
TCS (Tata Consultancy Services)
HCL Technologies
Tech Mahindra
LTI Mindtree

All these stocks traded in the red, extending the negative sentiment across the sector.

US Economic Concerns Weigh on IT Sector

A key driver of the IT sector’s decline has been the growing uncertainty surrounding US discretionary spending, which is a major revenue source for Indian IT firms.

Delayed Recovery in IT Spending: Revival of discretionary spending by US clients is now expected to take longer than anticipated.
Trump’s Trade Tariffs & Recession Fears: Concerns have grown over a potential US economic slowdown following Donald Trump’s possible tariff hikes.
Market Sentiment: Investors remain cautious as Trump has not ruled out a recession, fueling fears of sluggish demand for IT services.