Indian IT Stocks Slide as Trump’s Tariff Plan Sparks Market Jitters
Indian IT stocks took a hit on February 19, 2025, as investor concerns over U.S. trade policies triggered a sell-off. The Nifty IT index dropped nearly 600 points, or 1.38%, settling at 40,890.10. Some of the biggest losers were Tata Consultancy Services (TCS), Infosys, and LTI Mindtree, which saw their stock prices fall by up to 3.46%.
The decline comes in response to U.S. President Donald Trump’s announcement of reciprocal tariffs on February 13, a move aimed at reducing America’s trade deficit. The new tariff structure, set to take effect in early April, is causing uncertainty, particularly for export-driven sectors like IT and pharmaceuticals. With Indian IT companies earning a significant portion of their revenue from U.S. clients, investors are becoming cautious.
Market Performance: Top IT Stocks in the Red
LTI Mindtree led the losses, tumbling 3.46% to ₹5,472 per share as of 1:32 PM. TCS followed closely, dropping 2.63% to an eight-month low of ₹3,771, hovering dangerously close to its 52-week low of ₹3,591.50.
Infosys also witnessed a 2% decline, with shares trading at ₹1,816, marking a 9% drop from its 52-week high of ₹2,006 recorded in December last year.
Other major IT players, including L&T Technology Services (LTTS), HCL Technologies, and Tech Mahindra, also saw their stock prices dip by nearly 1% each.
A Few IT Stocks Defy the Trend
While most IT stocks struggled, companies less dependent on BFSI (Banking, Financial Services, and Insurance) clients fared better.
- Persistent Systems, Mphasis, and Coforge posted gains of nearly 1%, reflecting investor confidence in their business models.
- Wipro, with its consultancy-driven approach, traded in the green at ₹313 per share.
Understanding Trump’s Reciprocal Tariffs
What are reciprocal tariffs?
Reciprocal tariffs mean the U.S. will impose import duties equivalent to what American exports face in foreign markets. The move is intended to ensure a fairer trade balance but has left global markets on edge.
Though the specifics of these tariffs are still unclear, concerns are rising that Indian IT firms may face higher costs, making their services less competitive in the U.S. market. This could result in:
- Increased operational expenses for Indian IT companies.
- Reduced profit margins due to higher levies on software exports.
- A potential slowdown in U.S. corporate IT spending, impacting demand for Indian services.
Key Financial Metrics of IT Stocks
To provide a snapshot of how major IT firms are performing, here are their recent stock movements:
| Company | Share Price (₹) | Percentage Change | 52-Week High (₹) | 52-Week Low (₹) |
|---|---|---|---|---|
| LTI Mindtree | 5,472 | -3.46% | 6,000 | 5,400 |
| TCS | 3,771 | -2.63% | 4,100 | 3,591.50 |
| Infosys | 1,816 | -2.00% | 2,006 | 1,800 |
| L&T Technology Services | 3,200 | -1.00% | 3,500 | 3,150 |
| HCL Technologies | 1,000 | -1.00% | 1,100 | 950 |
| Tech Mahindra | 700 | -1.00% | 800 | 680 |
| Persistent Systems | 4,000 | +1.00% | 4,200 | 3,900 |
| Mphasis | 2,800 | +1.00% | 2,900 | 2,750 |
| Coforge | 4,500 | +1.00% | 4,600 | 4,400 |
| Wipro | 313 | +0.61% | 350 | 300 |
Note: Figures are based on recent market data and subject to change.
Investor Sentiment and Future Outlook
The fear of higher tariffs and rising costs is keeping investors cautious about IT stocks. Until more clarity emerges, many fund managers and retail investors may continue reducing their exposure to export-heavy IT firms.
However, industry experts believe that the long-term impact of these tariffs will depend on:
- The final list of affected services under the new trade policy.
- Potential negotiations between India and the U.S. to minimize damage.
- How Indian IT firms adapt, including diversifying revenue streams or passing costs onto clients.
Final Thoughts: A Testing Phase for Indian IT
While IT stocks have taken a hit due to fears of increased tariffs, the actual impact will become clearer in the coming months. Investors should keep an eye on:
- Updates from the U.S. government regarding tariff implementation.
- Quarterly earnings reports from IT firms to assess revenue impact.
- Potential strategies from Indian IT giants to mitigate risks.
For now, the sector faces an uncertain road ahead, and volatility is likely to persist until markets gain clarity on the full impact of Trump’s trade policies.
For more market insights, follow our news.
Stay tuned for more updates and insights on the stock market! For more insights on investing in the Indian stock market, check out resource like ET, NSE India.
Disclaimer: This blog post is for informational purposes only and should not be considered financial advice. Investors should conduct thorough research and consult with a qualified financial advisor before making any investment decisions.