Nifty IT Crashes Nearly 4% In Early Trade As IT Stocks Face Heavy Selling

The Nifty IT index fell nearly 4% in intraday deals on Wednesday, with all its constituents trading in the red as concerns over US interest rates, information technology (IT) spending and developments at Coforge added to selling pressure. At around 11:11 am, the Nifty IT index was down 2.96%.

IT stocks saw sharper losses than the broader market, with several large and mid-cap names falling between 5% and 9% in early trade during the session.

Coforge emerged as the biggest loser. Its shares dropped 8.7% to an intraday low of ₹1,781 on the National Stock Exchange (NSE). Infosys, Tech Mahindra, HCLTech, Persistent Systems and TCS declined between 3% and 4% in intraday deals. Mphasis and OFSS also came under pressure, falling between 2% and 3% in early trade.

Nifty IT Index Down 24% In 2026

The latest decline adds to a weak run for the IT sector. The Nifty IT index has fallen nearly 24% so far in 2026. Over a one-year period, the index has declined 17.72%, while it is down 8.04% over the past one month.

The sector has faced pressure as investors assess the timing of a recovery in technology spending and the impact of higher investment by global technology companies.

Reasons For Nifty IT Index Decline

Some possible reasons for the decline of the Nifty IT index in today’s trade are:

• US Fed Rate Outlook Weighs

Uncertainty ahead of the US Federal Reserve’s next meeting also added to the pressure on IT stocks. According to industry watchers, the probability of a rate hike has risen to 58%, compared with 47% a month ago.

A higher-for-longer rate environment could affect discretionary technology spending by North American companies, which remains an important market for Indian IT services firms.

Market watchers said concerns about a more aggressive Fed stance have added to the pressure on domestic IT stocks. Recent comments from Fed Chair Kevin Warsh at Jackson Hole, where he flagged still-elevated inflation, were also read as hawkish by markets.

• Resignation Of Coforge Chairman

Coforge faced additional selling after the company announced the immediate resignation of its Non-Executive Independent Director and Chairperson, OP Bhatt. The resignation came after concerns were raised by an internal audit over the Board's Evaluation Exercise, according to the company's exchange filing.

The board has appointed Vivek Sharma, a Non-Executive Independent Director, as interim chairperson until 31 January 2027. The developments at Coforge came as the stock was already facing broader weakness across the IT sector.

AI Spending Yet To Lift IT Demand

Industry watchers also pointed to a gap between rising technology infrastructure spending and the eventual benefit for Indian IT services companies. Current spending by hyperscalers remains focused on areas such as GPUs, data centres and cloud networks. The benefits for application development, integration and AI adoption work typically take several quarters to reach Indian IT service providers.

While strong hyperscaler growth and large backlogs indicate a sizeable pipeline of enterprise technology work, pricing pressure could remain as hyperscalers continue to invest heavily in infrastructure, industry watchers said.

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