Indian IT Shares Face Fresh Sell-Off Amid Weak US Economic Data

Indian IT shares faced fresh sell-off amid weak US economic data. The Nifty IT tanked around 0.85 per cent on March 7, 2025. This development followed a 2.6 per cent drop in the Nasdaq, induced by global trade tensions and weak US economic data. At present, global trade tensions and weak economic data from the US are indicating volatility and weaker investor sentiments.  

The fall in Nifty IT is understandable as the US accounts for the majority of revenue for India’s IT industry. Incidentally, the index had experienced a belief relief in its losing streak for two days. 

Amid this negative sentiment, the Nifty IT index tumbled 1.3 per cent in early morning trade on March 7, 2025, reaching 37,625 points. While the index recovered in the following hours, it closed 0.85 per cent down. 

Eight of the 10 major IT companies closed in the red, with LTIMindtree leading the decline at 2.45 per cent, followed by Infosys closing in red down by 1.80 per cent and Mphasis down by 1.89 per cent. Other notable losers included HCL Technologies, down by 1.69 per cent; Tech Mahindra, down by 0.76 per cent; L&T Technology Services, down by 0.72 per cent; Persistent Systems, down by 0.58 per cent, and Wipro, down by 0.52 per cent. 

According to a report released on March 6, 2025, US trade deficit rose to $131.4 billion in January this year, up from $98.1 billion a month ago (December 2024), as imports increased 10 per cent before the imposition of tariffs. Additionally, US job cuts in February 2025 surged to highest monthly total since July 2020, amid government workforce reductions, according to a CNN report. 

Market sentiment further soured after ADP report of March 5, 2025 displayed a drastic slowdown in private sector hiring. These developments have fuelled fears that the US Federal Reserve may struggle to sustain interest rate cuts amid inflationary pressures linked to new tariffs. 

Tariff Tensions Rattle Markets 

Additionally, recent tariff measures announced by US President Donald Trump, including temporary exemptions for Canadian and Mexican goods under the USMCA until April 2, 2025 have failed to ease broader anxieties.  

Notably, tariffs targeting China remain intact, with Beijing vowing to retaliate against US trade actions. Trump has also threatened “reciprocal tariffs” on countries like India starting April 2, amplifying uncertainty for export-driven sectors.