Shares of major Indian IT companies, including Infosys, TCS, Tech Mahindra, HCL Technologies, Persistent Systems, Coforge, Mphasis, Cyient, Wipro, Birlasoft, and Sonata Software, faced significant selling pressure on Thursday. The decline came after US President Donald Trump imposed steep reciprocal tariffs on key trading partners, including India.
IT stocks led the losses, with Infosys dropping 2.64%, TCS falling 3.13%, Tech Mahindra slipping 3.04%, and HCL Technologies declining 2.99% on the Sensex. The Indian IT services sector fears that the fresh tariff war initiated by Trump could negatively impact the demand for Indian IT services.
Other major losers in the BSE IT index included Mphasis (-4.25%), Coforge (-4%), Mastek (-2.76%), Cyient (-2.65%), Birlasoft (-2.21%), Sasken (-2.67%), Wipro (-2%), Sonata Software (-1%), and LTIMindtree (-2.11%).
The Nifty IT index fell by 3.35% (1,183 points) in early trade, mirroring weak global market sentiments and concerns over declining IT service demand. The BSE IT index also emerged as the worst-performing sectoral index, tumbling 1,058 points to 34,585, down from its previous close of 35,642.
Trump’s latest move includes a 27% tariff on Indian imports and 34% on Chinese imports. As per a commerce ministry official, the first 10% tariff will take effect from April 5, followed by an additional 17% from April 10.
Market Experts Weigh In on the Impact
Commenting on the situation, VK Vijayakumar, Chief Investment Strategist at Geojit Investments, highlighted the broader concerns. He noted that these higher-than-expected tariffs could spark retaliatory measures from other nations, potentially leading to a full-scale trade war that could hinder global trade and economic growth.
Additionally, inflation in the US could rise due to the tariffs, making it harder for the Federal Reserve to implement the expected interest rate cuts in 2025. This also raises the likelihood of a US recession by late 2025, which would negatively impact global markets and economies.
On a positive note, Vijayakumar pointed out that Indian pharmaceutical exports have been exempted from the tariffs, which could drive investor interest in the sector. Meanwhile, domestic consumption-driven industries may act as a safe haven for investors amid market volatility. Looking ahead, he suggested that the situation could change if countries like India negotiate favorable bilateral trade agreements with the US.
