Nifty IT Slips Nearly 5 Per Cent, Extends Losses For Fourth Straight Day

IT stocks traded under pressure on July 14, 2025 amid declines in the headline indices. The headline indices continued to extend their losses, with the Sensex and the Nifty falling 0.47 per cent and 0.42 per cent to touch their intra-day lows. However, the Nifty IT index declined nearly 2 per cent to trade at an intra-day low of 37,206.95. With today’s losses, the IT index has continued to decline for the fourth consecutive day.

Nifty IT Index Extends Losses

In its four-session decline, the Nifty IT index has fallen nearly 5 per cent to trade at a low of 37197.75. Wipro, LTI Mindtree and Tech Mahindra emerged as the top losers among IT stocks, as they traded lower by as much as 1.90 per cent. Wipro’s share price declined the most, as the stock slipped over 2 per cent to trade at an intra-day low of Rs 253 apiece on the NSE. 

Shares of other index constituents, such as Coforge, Persistent and Mphasis also came under pressure and traded lower by as much as 0.26 per cent. Notably, nine of the 10 constituents of the Nifty IT index declined in early trade on July 14. However, shares of Oracle Financial Services Software bucked the trend and traded in the green at Rs 8,657 apiece, up by 0.24 per cent on the NSE.

The top constituents of the Nifty IT index also declined, pulling the index lower. Nifty IT heavyweights, such as Infosys, Tata Consultancy Services (TCS) and HCL Technologies fell as much as 1.61 per cent. The share price of Infosys and TCS declined nearly 2 per cent to their respective intra-day lows on the NSE.

Why Are IT Stocks Declining?

Shares of Indian IT companies extended losses as the market continued to factor in the financial results declared by TCS on July 10. The company’s declining revenue from operations and cautious outlook kept investor sentiment weak.

TCS posted robust bottom-line growth, as its consolidated profit after tax (PAT) surged by nearly 6 per cent to Rs 12,819 crore in Q1 FY 2025-26 compared to Rs 12,105 crore in Q1 FY 2024-25. On a quarter-on-quarter (q-o-q) basis, TCS’ consolidated PAT also increased by over 4 per cent in the June quarter compared to Rs 12,293 crore in the previous quarter.

Despite deal wins and bottom-line growth, TCS’ sequentially declining revenue from operations and cautious commentary disappointed investors. TCS’ consolidated revenue from operations for Q1 FY26 fell by nearly 2 per cent to Rs 63,437 crore compared to Rs 64,479 crore in Q4 FY25.

TCS CEO K Krithivasan also said in a release that “the continued global macroeconomic and geopolitical uncertainties caused a demand contraction”.

Notably, TCS became the first company in the domestic IT sector to post its quarterly earnings. The company’s earnings act as a gauge to understand investor sentiment regarding the IT space. Following the results, investors are now bracing for similar results from other major domestic IT companies.

Ajit Mishra – SVP, Research, Religare Broking Ltd told Outlook Money that after TCS’ lukewarm performance, the market is now looking forward to the announcement of results by other major domestic IT companies.

“Despite healthy deal wins of $9.4 billion, muted topline performance reinforced concerns about delayed project ramp-ups. Investor focus has now shifted to upcoming earnings from peers which are likely to influence sentiment,” Mishra said.

Apart from the lower-than-expected results, trade tensions between the US and its trading partners have also escalated. This escalation is likely to have contributed to the decline seen in shares of export-orientated IT services companies. Most major domestic IT companies depend on the US and Europe as key geographies for revenue. Thus, rising trade tensions are expected to weaken investor sentiment.

Earlier on July 12, US President Donald Trump threatened to impose a 30 per cent tariff on imports from the EU after the US and key trading partners failed to reach a comprehensive trade deal. Notably, the trade war has weakened investor sentiments and rattled investors.

“Rising trade tensions following Trump’s renewed tariff threats are adding pressure to IT stocks. His renewed threats of imposing steep tariffs on imports from countries like the EU and Mexico have raised fears of a broader trade conflict, which could eventually impact client confidence and tech spending. The risk remains that prolonged trade tensions could delay tech budgets, disrupt decision-making cycles, and weigh on deal flows,” Mishra said.

Sumit Pokharna, VP-Fundamental Research, Kotak Securities added that after the declines seen in today’s trade a meaningful settlement of the tariff war and a possible lending rate cut by the US Federal Reserve are expected to be tailwinds for the IT sector.

“We believe any meaningful settlement in the tariff war and a rate cut by the US Federal Reserve will be positive for the IT sector, we opine. We are waiting for the discretionary demand revival, which will support margin growth and revenue growth,” Pokharna said.

At the time of writing, the Nifty IT index was trading at 37,132.05, down by 1.49 per cent.