IT Stocks Plunge Up to 10% as US Imposes Reciprocal Tariffs; Persistent, Coforge Among Major Losers
Indian IT stocks took a severe beating on Thursday, tumbling up to 10% after US President Donald Trump announced reciprocal tariffs on approximately 60 countries, including India. This decision, aimed at countering high import duties on American products globally, has raised concerns over the impact on India’s exports to the US.
While the Trump administration has not explicitly mentioned the IT sector, market analysts fear that these tariffs could affect the Indian technology industry, which heavily depends on US clients for revenue.
Major IT Stocks That Suffered the Biggest Losses
The Indian IT sector witnessed a broad sell-off, with several major stocks seeing significant declines:
| Company | Stock Price (₹) | % Change |
|---|---|---|
| Persistent Systems | 4,788.20 | -9.92% |
| Coforge | 7,157.25 | -7.77% |
| KPIT Technologies | 1,212.00 | -7.66% |
| Tata Consultancy Services (TCS) | 3,403.90 | -3.98% |
| Tech Mahindra | 1,369.65 | -3.79% |
| HCL Technologies | 1,470.80 | -3.71% |
| Mphasis | 2,374.30 | -4.05% |
| Infosys | 1,497.00 | -3.41% |
| Wipro | 256.40 | -2.75% |
| Cyient | 1,217.25 | -2.67% |
| Mastek | 2,176.80 | -0.44% |
Among the 30-share Sensex firms, TCS, Tech Mahindra, HCL Technologies, and Infosys were among the worst hit, dragging down the overall BSE IT index by 3.78%, closing at 34,293.59 points.
Meanwhile, the benchmark BSE Sensex also fell 322.08 points (-0.42%), settling at 76,295.36, reflecting overall bearish sentiment in the market.
Impact of US Tariffs on Indian IT Companies
The US is the largest market for Indian IT services, contributing nearly 60% of the sector’s revenue. While the direct impact of tariffs on IT services is still unclear, concerns have emerged regarding:
- Increased Cost of Doing Business – If IT services come under the tariff scanner, Indian companies may face higher operational costs, impacting their profitability.
- Client Sentiment & Contracts – The uncertainty surrounding the tariffs may delay new contracts from US-based clients, potentially slowing growth.
- Stock Market Volatility – Investors react negatively to policy uncertainty, leading to higher volatility in IT stocks.
- US-India Trade Tensions – The introduction of 27% reciprocal tariffs on India further intensifies trade disputes, which could spill over into multiple sectors, including IT.
Why Did the US Impose These Tariffs?
US President Donald Trump has been advocating for fair trade policies and reducing the US trade deficit. The key reasons behind these tariffs include:
- Countering Higher Import Duties: India imposes high import duties on American goods, which the US sees as unfair trade practices.
- Reducing Trade Deficit: The US seeks to balance trade by discouraging imports from countries imposing higher duties.
- Political Agenda: Strengthening domestic industries ahead of elections is a common strategy used by political leaders.
What’s Next for IT Stocks?
Market analysts believe that IT stocks may remain under pressure in the short term as investors assess the full impact of these tariffs. However, long-term fundamentals of large-cap IT companies like TCS, Infosys, and HCL Technologies remain strong due to:
✔ Robust global demand for digital transformation services
✔ Resilient order pipelines from US & European clients
✔ Strong financials with high operating margins
Experts suggest investors should avoid panic selling and instead focus on companies with strong cash reserves, diversified client bases, and scalable operations.
Frequently Asked Questions (FAQs)
1. Why did IT stocks fall sharply today?
IT stocks fell up to 10% after the US imposed reciprocal tariffs on 60 countries, including India. Although IT services were not directly mentioned, investors fear a negative impact on Indian IT exports.
2. Which IT stocks saw the biggest drop?
Persistent Systems (-9.92%), Coforge (-7.77%), and KPIT Technologies (-7.66%) were among the biggest losers in Thursday’s trading session.
3. How will US tariffs affect the Indian IT sector?
The US is the largest market for Indian IT companies. If IT services are affected by tariffs, it could lead to higher operational costs, reduced client spending, and lower profit margins for Indian IT firms.
4. What is the BSE IT index, and how did it perform today?
The BSE IT index tracks the performance of leading IT stocks in India. It dropped 3.78% today, closing at 34,293.59 points due to heavy selling pressure in the sector.
5. Should investors sell their IT stocks now?
Market experts suggest not to panic sell and instead focus on IT companies with strong fundamentals, high profitability, and diverse revenue streams to withstand short-term volatility.
6. What are reciprocal tariffs, and why did the US impose them?
Reciprocal tariffs are trade duties imposed by the US to counter higher import taxes levied by other countries. The US aims to protect domestic businesses and reduce the trade deficit with countries like India.
Conclusion
The sharp fall in Indian IT stocks highlights investor concerns over US-India trade tensions and the impact of reciprocal tariffs. While the short-term market reaction is negative, long-term growth prospects remain strong for large IT firms with diversified global operations. Investors should stay informed and focus on company fundamentals before making investment decisions.
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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.