Infosys, LTIM, HCLTech, TCS: Why IT stocks are tumbling today

Shares of leading Indian IT companies faced significant pressure on Thursday, with stocks like Infosys, TCS, HCLTech, Tech Mahindra, LTIMindtree, and LTTS declining by 2-4%. The sell-off contributed to a broader market downturn, pulling down the Sensex by nearly 1,000 points and dragging the Nifty50 below the 24,000 mark.
The Nifty IT index, which tracks the sector, dropped 2.3%, making it the worst-performing index. Infosys led the decline with a 3% drop, while Tech Mahindra and LTIMindtree were down by 2.5%. HCLTech, MPhasis, and TCS also recorded losses exceeding 2%.
The fall was driven by concerns over the latest US inflation data, which revealed stronger-than-expected consumer spending in October. This raised doubts about the pace of interest rate cuts by the US Federal Reserve, with traders now estimating a 65% chance of a rate cut next month.
However, the outlook for further easing in 2025 remains uncertain, unsettling global markets.
Since Indian IT companies derive a significant portion of their revenue from US operations, any changes in the Fed’s monetary policy trajectory have a direct impact on their profitability.
The slower-than-expected rate cut trajectory has heightened concerns about reduced demand from key markets. “The inflation numbers have renewed fears of prolonged monetary tightening, impacting IT sector revenues reliant on US clients,” said an analyst tracking the sector.
Broader market sentiment was also dampened by continued selling by foreign institutional investors (FIIs), who have remained net sellers in recent sessions, adding to sectoral weakness.
The global uncertainty spilled over to Asian markets, with the MSCI Asia-Pacific index (excluding Japan) edging down 0.07%.
As IT stocks grapple with these challenges, investors remain cautious, awaiting further clarity on global economic trends. At 1:43 pm, the Sensex was down 998.85 points to 79,248.13, while the NSE Nifty50 fell 301.85 points to 23,973.05, reflecting a challenging trading session for Dalal Street.