Indian IT stocks, including Tata Consultancy Services (TCS), Infosys, and LTI Mindtree, fell by up to 3.5% on February 19 amid concerns over US President Donald Trump’s newly announced reciprocal tariffs. The Nifty IT index dropped nearly 600 points (1.38%), reflecting investor concerns over potential disruptions to the Indian IT sector.
US Tariffs Trigger Sell-Off in IT Stocks
On February 13, President Donald Trump announced a set of reciprocal tariffs to curb the US trade deficit, set to take effect from April 2025. The move has led investors to shift away from export-oriented stocks, including IT and pharmaceutical companies, as these sectors are heavily reliant on US markets for revenue.
With Indian IT companies such as TCS, Infosys, and Wipro generating a significant share of their revenue from the US, market sentiment has turned negative, leading to a sharp decline in stock prices.
Stock Performance: IT Sector Faces Broad-Based Decline
- LTI Mindtree (-3.46%) – ₹5,472 per share (biggest loser in the Nifty IT index)
- TCS (-2.63%) – ₹3,771 per share (eight-month low, close to its 52-week low of ₹3,591.50)
- Infosys (-2%) – ₹1,816 per share (down 9% from its 52-week high of ₹2,006 in December 2024)
- HCL Technologies, Tech Mahindra, L&T Technology Services (LTTS) – Down nearly 1%
The Nifty IT index, a key benchmark for Indian IT stocks, dropped to 40,890.10, reflecting the bearish sentiment in the market.
Selective Gains in IT Stocks Less Exposed to the US Market
Despite the broad sell-off, some IT stocks showed resilience, particularly those less dependent on the BFSI (Banking, Financial Services, and Insurance) sector in the US:
- Persistent Systems, Mphasis, and Coforge – Up nearly 1%
- Wipro – ₹313 per share, trading slightly in the green due to its higher focus on consultancy services rather than exports.
Market Outlook: What’s Next for Indian IT Stocks?
With Trump’s tariffs set to take effect in April 2025, investors are expected to remain cautious about Indian IT stocks. Key factors that will shape the sector’s performance in the coming months include:
- Clarifications on US trade policies – The extent of impact on Indian software exports and IT outsourcing will depend on further details from US regulators.
- US corporate spending trends – Any reduction in technology budgets due to economic uncertainty could affect the growth of Indian IT companies.
- Long-term buying opportunities – If the current downturn continues, institutional investors may see value in quality IT stocks at lower valuations.
As the IT sector navigates global trade uncertainties, market participants will closely monitor developments around US trade policies, tariff structures, and IT spending trends in the coming months.
