Nifty IT Extends Fall For Sixth Straight Session, Slips Over 6 Per Cent  - Know Why

Indian stock markets witnessed a little respite on February 27 as the benchmark indices closed flat after six sessions of continuous decline. The Nifty50 closed lower by 2.5 points or 0.01 per cent at 22,545.05 levels and the Sensex settled higher by 10.31 points or 0.01 per cent at 74,612.43 levels. Key sectoral indices such as the Nifty Auto, Nifty IT, and and Nifty Metals closed in the red down by up to 2.09 per cent. Nifty Bank bucked the trend and closed in the green, up by 0.28 per cent.

The Nifty IT index extended losses for the sixth straight session as it closed in the red on February 27. The Nifty IT index closed lower at 38,946.65 level, down by 0.47 per cent. The index has declined over 6 per cent in the six sessions between February 18 and February 27.

Which Stocks Declined The Most

As many as nine out of the ten constituents of the Nifty IT index declined on February 27. Shares of computer software and consulting company, Mphasis Ltd fell the most as it closed lower by 3.55 per cent at Rs 2,365.75 apiece on the NSE. Earlier today the stock declined 3.78 per cent to hit an intraday low of Rs 2,360 apiece.

Other major losers among Nifty IT constituents include Coforge Ltd, L&T Technology Services Ltd and LTI Mindtree Ltd which closed lower by up to 2.33 per cent.

Index heavyweights such as Infosys Ltd, Tata Consultancy Services Ltd, HCL Technologies Ltd. and Tech Mahindra Ltd declined up to 0.92 per cent. Shares of Infosys closed lower by 0.27 per cent and Tata Consultancy Services shares closed lower by 0.59 per cent. Shares of Tech Mahindra closed lower by 0.88 per cent.

Notably, shares of Wipro bucked the trend as they closed in the green at Rs 292.35 apiece, up by 0.36 per cent on the NSE.

Why Is Nifty IT Declining

Indian IT stocks witnessed a six-session decline as business activity in the US showed signs of a slowdown. The US is a major source of revenue for India’s IT-enabled services sector.

According to S&P Global February’s flash PMIs (Purchasing Managers Index) showed a slowing of business growth in the US. The market intelligence provider said that uncertainty and disruptions caused by recent US government policy initiatives contributed to the slowness. Additionally, the imposition of tariffs by US President Donald Trump was also cited as a key cause.

Bhavya Shah, Head of Research, Wallfort PMS told Outlook Money that the IT sector declined following concerns regarding US tariffs and their impact on deal pipelines which in turn can affect business momentum.

"The IT sector is under pressure, with looming US tariff concerns unsettling investors and clients. This uncertainty could slow deal pipelines and affect business momentum for IT companies," Shah said.

Shah also said that continued selling by foreign investors strained liquidity and dampened investors sentiment which also contributed to the IT index declining in the last six sessions.

"Foreign investors continued their exit from the Indian equity market, pulling out Rs 46,793 crore in February 2025, following Rs 87,375 crore of outflows in January. This sustained selling has strained market liquidity and dampened sentiment, leading to a downturn in major IT stocks," Shah said.

Despite near-term challenges, long-term investors may find strength in the fundamentals of large cap IT stocks. Their adaptability, tech investments, and cost strategies could aid recovery. However, investors should track global trends, FII flows, Sector developments before making decisions.

Shah projected that several factors such as the strong fundamentals of largecap IT sector stocks, their adaptability and tech investments could aid recovery in the sector. However he advised investors to track global trends, FII flows and sectors specific developments.

Despite near-term challenges, the fundamentals of large cap IT stocks and their adaptability, tech investments, and cost strategies could aid recovery. However, investors should track global trends, FII flows and sector developments.