Summary of this article
Nifty IT fell 3.24 per cent, extending losses for the sixth session
Coforge shares tumbled over 5 per cent after chairman OP Bhatt resigned following an internal audit
US rates, crude oil, visa costs and AI concerns are hurting IT stocks
Indian IT stocks came under heavy selling pressure on September 9, 2026, with the Nifty IT index falling 3.24 per cent and extending its losing streak to six straight sessions. All constituents of the index closed in the red. The index has now declined 8.30 per cent over six sessions, as investors grapple with a mix of company-specific concerns, rising US bond yields, higher crude oil prices, uncertainty over US interest rates, and tighter immigration rules.
Coforge led the decline after its chairman and independent director O.P, Bhatt resigned with immediate effect following concerns raised by an internal audit over the company’s board evaluation process. The shares of Coforge fell 5.38 per cent to Rs 1,845 on the NSE. The stock had fallen as much as 7 per cent during the session.
According to the company, its internal auditor reviewed the Board Evaluation Exercise and the resulting Board Evaluation Report as part of its Q2 FY26 internal audit plan. The review found gaps in the process and disclosure of information, including information related to the chairman’s performance evaluation.
Coforge said certain material information contained in or relating to the report had not been fully disclosed to the board when it was presented.
The board subsequently sought an explanation from Bhatt. He maintained that he had acted in “good faith” during the evaluation exercise, but resigned on September 8 before the board completed its review or reached a final decision. Vivek Sharma, a non-executive independent director, has been appointed interim chairperson until January 31, 2027. The development added to selling pressure in a sector that was already facing several external headwinds.
Following Coforge, Infosys declined 4.34 per cent to Rs 1,035. HCL Technologies fell 3.70 per cent to Rs 1,229.80, while Tech Mahindra declined 3.27 per cent to Rs 1,508. Wipro fell 2.62 per cent to Rs 167, and Persistent Systems was down 2.54 per cent at Rs 5,419.
TCS declined 2.11 per cent to Rs 2,208, while Mphasis fell 2.02 per cent to Rs 2,307.50. Oracle Financial Services Software slipped 1.27 per cent to Rs 11,630. LTTS was the least affected stock in the index, falling 0.41 per cent to Rs 4,412.
Why Are IT Stocks Falling
The recent correction in Nifty IT has come due to several factors rather than a single trigger. Sumit Pokharna, vice president of fundamental research at Kotak Securities, said this correction reflected a combination of heightened geopolitical uncertainty, elevated crude oil prices, rising expectations of tighter US monetary policy, higher bond yields, increasing visa-related costs, and growing concerns around the disruptive impact of generative AI on traditional IT services.
US Bond Yields and Fed Rate Concerns
One of the biggest concerns for IT investors is the changing outlook for US interest rates. Stronger-than-expected US jobs data released last week revived expectations that the US Federal Reserve may not ease policy as quickly as investors had expected. That triggered a sell-off in Indian IT stocks on September 7, with the Nifty IT index falling more than 2 per cent that day.
The pressure has intensified this week. The US 10-year Treasury yield climbed to around 4.81 per cent today, its highest level since October 2023, as the surge in crude prices added to concerns of inflation. Markets are also assigning a higher probability to a US rate hike at the September 16 Fed meeting. According to Chicago Mercantile Exchange’s (CME) FedWatch tool, the markets are pricing in a 62.40 per cent probability of a rate hike.
Higher US Treasury yields can hurt technology stocks because they increase the return available from relatively safer assets and raise the discount rate used to value future corporate earnings. IT companies, whose valuations depend heavily on future earnings growth, can, therefore, see greater selling when bond yields rise.
Crude Oil Has Become Another Problem
Brent crude futures prices have crossed above $100 a barrel as the West Asia conflict intensified.
For India, higher oil prices create concerns over inflation, trade deficit, and overall economic growth. Rising oil prices are adding to global inflation concerns at a time when investors are already worried about US interest rates and technology spending.
H-1B Visa Costs are Another Overhang
US immigration policy has emerged as a separate concern for Indian IT companies, given their dependence on skilled professionals working on client projects in the US. From September 9, a $4,000 fee for H-1B petitions and a $4,500 fee for L-1 petitions have been extended to certain visa extension applications, increasing immigration-related costs for large employers.
The Trump administration has also proposed a new $103,265 fee for new H-1B applications. The proposal is currently subject to a public comment process and is separate from the existing visa fee structure.
A sharp rise in the cost of moving employees to the US could make the traditional offshore-onsite delivery model more expensive and encourage companies to rely more on local hiring.
Says Pokharna: “Recent data released by the US Department of Homeland Security indicates a significant decline in H-1B visa lottery participation by companies, following the introduction of a $100,000 fee for certain H-1B hires from outside the US.”
He said the higher visa costs could affect offshore and onsite staffing models and potentially put pressure on margins and revenue growth. “Consequently, major technology companies, including Infosys, TCS, and IBM, have reportedly reduced or reassessed their overseas hiring and visa sponsorship plans,” he adds.
AI Is Creating A Longer-Term Valuation Concern
The latest sell-off is also taking place against a longer-running debate over the impact of generative artificial intelligence (AI) on traditional IT services. Investors are trying to assess whether AI will increase technology spending by creating new demand for cloud, data, automation and AI implementation services, or reduce the amount of human labour required for traditional software development and maintenance.
The business model of Indian IT companies depends heavily on large workforces and billing clients for manpower-driven technology services. AI is now putting that model under pressure. Investors are paying closer attention to revenue per employee, employee productivity, and the profitability of individual services, as automation reduces the amount of human work needed to deliver technology services.
Pokharna said this remains a key risk for the sector. “While near-term sentiment remains weak, the extent of the correction will ultimately depend on the duration of geopolitical risks, US technology spending, visa policy developments, and the pace of AI-led disruption,” he adds.
What Should Investors Watch Out For
The next major trigger is the upcoming US inflation data due this week. The data will tell whether these pressures remain temporary or begin to affect actual technology spending and earnings. Further, investors will also keep an eye on the US Federal Reserve’s decision at its September 15-16 policy meeting. A moderation in inflation and bond yields could ease some of the pressure on technology valuations. On the other hand, persistently high oil prices and a more hawkish Fed stance could keep the sector under pressure.
