Nifty IT index drops as global tech selloff, US inflation weigh

Indian IT stocks fell sharply on Thursday, dragging the Nifty IT index down about 2.7% to an intraday low of 27,519, as a global technology selloff and hotter US inflation data stoked worries over prolonged high interest rates and future client spending. The index has now lost more than 5% so far this week, wiping out roughly ₹50,000 crore in market capitalisation within minutes in intraday trade.

Market overview

Index / Segment	Session move	Comments
Nifty IT index	Down about 2.7% intraday; over 5% lower this week	Hit low of 27,519; among worst sectoral performers.
Nifty 50	Down around 0.5% intraday	Broader market fall milder than IT-specific decline.

• Nifty IT underperformed the headline index despite a relatively modest Nifty 50 decline.
• Around ₹50,000 crore in IT sector market value erased within about 15 minutes.
• Sector weakness concentrated in large and mid tier IT services exporters.

Key movers in IT

Top Gainers	Sector	Notable Factor
None significant	IT	Session dominated by broad-based declines across constituents.

Top Losers	Stock	Sector	Notable Factor
1	HCL Technologies	IT services	Fell about 3.5%, biggest loser on Nifty IT.
2	Infosys	IT services	Declined around 3%, weighed on index.
3	LTIMindtree	IT services	Dropped close to 3% in intraday trade.
4	Mphasis	IT services	Lost more than 2% among mid tier names.
5	Persistent Systems	IT services	Fell over 2%, tracking sector weakness.
6	TCS	IT services	Declined over 1.5%, contributed to market cap erosion.
7	Coforge	IT services	Slipped over 1.5%.
8	Tech Mahindra	IT services	Dropped over 1.5%.
9	Wipro	IT services	Lost around 1%.
10	L&T Technology Services	Engineering R&D	Down about 1%.

• Selling pressure was broad based across large caps like Infosys, TCS, HCLTech and mid caps.
• Heavyweights amplified the index fall given their high weight in Nifty IT.

Global cues and macro drivers

Market / Asset	Movement	Notes
Nasdaq Composite	Down about 2%	Tech and AI related stocks came under pressure.
S&P 500	Down around 1.6%	Weakness led by technology counters.
Oracle (extended trade)	Fell about 8.9%	Higher capex guidance and large planned fundraise hit sentiment.
US CPI (May, YoY)	4.2%, vs 3.8% in April	Fastest rise since April 2023, per US Labor Department data.

• Global tech indices fell overnight, setting a weak tone for Indian IT at the open.
• US inflation accelerated to 4.2% year on year in May, driven by higher energy prices.
• Monthly US CPI rose 0.5% after a 0.6% increase in April.
• Higher inflation reinforced expectations that the US Federal Reserve may keep rates elevated for longer.
• Traders priced in over a 70% probability of a US rate hike by December, per derivatives market indicators.
• Oracle’s plan to raise nearly $40 billion via debt and equity for AI infrastructure raised concerns on stretched tech valuations and leverage.

Sectoral and structural concerns

Sector / Theme	Direction (approx.)	Key Drivers
Indian IT services	Down 2% to 3.5% across majors	US inflation, global tech selloff, AI disruption worries.

• Indian IT firms derive a large share of revenue from US clients.
• Higher US rates and inflation are seen as negative for discretionary tech spending.
• Recent advances in artificial intelligence have raised questions about traditional IT services models.
• Several IT stocks have fallen as much as 11% over the past month.
• Earlier AI related selloffs in the sector saw only brief recoveries before weakness resumed.

Technical and sentiment snapshot

Statistic	Value / Change	Context
Nifty IT weekly move	Down more than 5%	Reflects sustained selling beyond a single session.
Nifty IT intraday low	27,519	Key support zone tested amid heavy volume.

• The index drop of about 2.7% in the session came with sharp, fast selling.
• HSBC, in a recent sector note, highlighted a cautious stance on Indian IT.
• Market participants remain sensitive to US macro data and global tech flows for near term direction.

Outlook linked to US markets

• Indian IT stocks are expected to track US technology indices closely given revenue exposure.
• Persistent inflation and geopolitical tensions in the Middle East add to risk aversion.
• Stable but firm US dollar levels reflect safe haven demand, affecting risk assets.
• Any shift in US Federal Reserve guidance on rates will be closely watched by IT investors.

FAQs

Q: Why did the Nifty IT index fall more than the Nifty 50 today?

• Nifty IT dropped about 2.7% versus roughly 0.5% for Nifty 50, as global tech weakness, US inflation data and sector specific worries around AI and US client spending hit IT exporters harder than the broader market.

Q: Which Indian IT stocks were hit the most in this session?

• HCL Technologies fell about 3.5%, while Infosys and LTIMindtree slid around 3% each. Mphasis and Persistent Systems dropped over 2%, and TCS, Coforge and Tech Mahindra lost more than 1.5%.

Q: How does US inflation impact Indian IT companies?

• Higher US inflation and the prospect of prolonged high interest rates can curb discretionary technology budgets of US clients, which supply a large portion of revenue for Indian IT firms, making their earnings outlook more vulnerable.

Frequently Asked Questions

Why did the Nifty IT index fall more than the Nifty 50 today?

Nifty IT slid about 2.7% versus roughly 0.5% for Nifty 50 because global tech weakness, hotter US inflation data and worries about US client spending and AI disruption hit IT exporters harder than the broader market.

Which Indian IT stocks were the biggest losers in this session?

HCL Technologies fell about 3.5%, Infosys and LTIMindtree dropped around 3% each, Mphasis and Persistent Systems lost over 2%, while TCS, Coforge and Tech Mahindra declined more than 1.5%.

What role did US inflation data play in the IT selloff?

US CPI rose 4.2% year on year in May, its fastest pace since April 2023, reinforcing expectations of prolonged high Federal Reserve rates, which in turn raised concerns about future US tech spending that Indian IT firms rely on.