Indian IT stocks face fresh selloff on weak US economic data; Nifty IT tanks over 1%

Table of Content


Indian stock market: After a two-day relief rally, Indian technology stocks resumed their losing streak on Friday, March 6, tracking the 2.6% slide in the Nasdaq Composite overnight. 

Mounting global trade tensions and weak economic data from the U.S., the world’s largest economy, are signaling weakness and unsettling investor sentiment, as this region accounts for the majority of revenue for Indian software companies. 

Amid this negative sentiment, the Nifty IT index tumbled 1.3% in early morning trade today, reaching 37,625 points. While the index recovered in the following hours, it remains 1.03% down as of 2:00 p.m.

Also Read | Is a market rebound coming in March? What historical data suggests

Eight of the 10 constituents of the index traded in the red, with Infosys emerging as the top loser, down 2.1%, followed by Mphasis, HCL Technologies, LTIMindtree, L&T Technology Services, and Tech Mahindra, all trading with losses between 1% and 2%.

Softening economic data, rising tariff uncertainty weigh on Indian IT stocks

A report released on Thursday revealed that the U.S. trade deficit swelled to a record $131.4 billion in January, up from $98.1 billion a month, as imports surged 10% ahead of the imposition of tariffs. In other economic news, U.S. job cuts in February reached their highest monthly total since July 2020, driven by government workforce reductions, CNN reported, citing Challenger, Gray & Christmas’s latest monthly job cuts report released Thursday.

Also Read | US economy: Is stagflation making a comeback amid Trump turbulence?

Efforts by the Trump administration to slash spending and shrink the government have resulted in unprecedented layoffs of federal workers, which experts believe could pose a risk to consumer spending, the main engine of the economy.

Tariffs on imports, already imposed or planned by President Donald Trump in his first month in office, have eroded consumer and business confidence. Fears are mounting that tariffs, which are a tax, will drive up the prices of goods and limit the Federal Reserve’s ability to continue cutting interest rates. U.S. economic growth has already slowed in the fourth quarter of the last calendar year.

Meanwhile, a report released on Wednesday showed that U.S. private sector hiring collapsed last month.

Also Read | Donald Trump’s obsession with rare earth elements explained: What are they?

Forex headwinds

The economic concerns are also driving the U.S. dollar lower, which has dropped 3% over the last four trading sessions, further weighing on sentiment. This led investors to shift towards other safe-haven currencies, including the Japanese yen and Swiss franc.

Indian IT companies earn a significant portion of their revenue in U.S. dollars, and when the dollar weakens against the Indian rupee, the same revenue translates into fewer rupees, which will impact on earnings.

Also Read | Trump’s tariff war: The intended and unintended consequences

According to experts, the rising economic uncertainty is also influencing Trump’s tariff decisions, as he recently granted temporary tariff exemptions for Canadian and Mexican goods covered under the North American trade agreement (USMCA) until April 2.

However, Thursday’s tariff exemptions excluded those imposed on China. China is standing firm, stating that it is prepared to fight “any type of war” with the U.S. Trump is poised to enact “reciprocal tariffs” on April 2 on foreign nations that impose import taxes on U.S. goods, with India being one of the countries exposed to these tariffs.

Also Read | How India is buckling up for tariff as Trump calls it ‘very high tariff nation’

Meanwhile, February’s nonfarm payrolls report will be the next big catalyst on investors’ radar, offering further insight into the health of the economy.

Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before taking any investment decisions.

Catch all the Business News , Market News , Breaking News Events and Latest News Updates on Live Mint. Download The Mint News App to get Daily Market Updates.

Business NewsMarketsStock MarketsIndian IT stocks face fresh selloff on weak US economic data; Nifty IT tanks over 1%

MoreLess



Source link

AIMPWA

mmkrishnandasu@gmail.com http://msmenews.sbs

Leave a Reply

Your email address will not be published. Required fields are marked *

Recent News

Trending News

Editor's Picks

Centre sets new five-year target to cut debt to half of GDP; signals robust capital spending, support to states

The Union budget has set a new five-year target to cut the central government’s debt to 50% of gross domestic product, give or take 1%, by 31 March, 2031. The budget, presented by finance minister Nirmala Sitharaman on Saturday, also sought to signal the Narendra Modi administration’s commitment to fiscal prudence and infrastructure creation, including...

Budget sows seeds of change for agriculture but gaps remain

The Economic Survey called agriculture the “sector of the future” and the FM echoed this sentiment in her budget speech, emphasizing garib, youth, annadata and nari. Despite this focus, key gaps remain. Firstly, there is a budget cut for agriculture ministry. Despite the rhetoric, the Ministry of Agriculture and Farmers’ Welfare (MOA) saw a ₹3,500...

ALL INDIA MSMES PROMOTION AND WELFARE ASSOCIATION

Quick Links

Popular Categories

Must Read

AIMPWA © 2025- All Right Reserved. Designed and Developed by  growGX.com