Nifty IT Tumbles 1.6% On Tariff Jitters, Monthly Expiry

IT stocks declined in trade on August 28, weighed down by broad-based selling across the market following the implementation of an additional 25 per cent tariff by the US, which came into effect on August 27. Sentiment was further dampened by the monthly derivatives expiry, adding to the pressure on equities. The Nifty IT index, which tracks the performance of the sector, slipped as much as 1.71 per cent during the session before settling 1.59 per cent lower.

Index heavyweights like Infosys, Tata Consultancy Services (TCS) and HCL Technologies, which cumulatively constitute nearly 62 per cent of the index’s weight, fell 1.74 per cent, 1.88 per cent, and 2.85 per cent, respectively.

Mid-cap IT stocks like Persistent Systems, Mphasis and Oracle Financial Services Software also declined 0.84 per cent, 1.53 per cent and 2.07 per cent, respectively.

Wipro, LTIMindtree, Tech Mahindra and Coforge also ended in the red, between 0.5 per cent and 1 per cent. All the constituents of the index ended the session in the negative territory.

Vaqarjaved Khan, CFA, senior fundamental analyst at Angel One, said, “IT stocks have been falling on overall market weakness on account of additional tariffs coming into play from August 27. Total tariffs on Indian exports to US have now increased to 50 per cent.”

Nifty IT Underperforms Nifty 50

Nifty IT index is trading 23 per cent lower than its all-time high level, hit on December 13, 2024.

On a year-to-date (YTD) basis, the Nifty IT index has declined 18.2 per cent. Over the past year, it has significantly underperformed the benchmark Nifty 50, falling 16.3 per cent as against just 2.20 per cent decline in the headline index.