Nifty IT Index Declines Over 2%: Why Are Indian IT Stocks Falling today, September 5?

Indian information technology (IT) stocks fell sharply on Friday, September 5, as fears of a potential US crackdown on India’s IT sector spooked investors. The Nifty IT index slumped as much as 2.3% during the day. With this sharp decline, the Nifty IT index has slipped to a fresh three week low. 

Key Reasons Behind the Sharp Fall in IT Stocks on September 5 

The decline was triggered by an unconfirmed report that US President Donald Trump may impose tariffs on the IT industry, a sector heavily dependent on American clients for revenue. IT majors like Tata Consultancy Services (TCS), Infosys, Wipro, and HCLTech saw immediate selling pressure. The concerns deepened after weak US labour data raised worries about slowing economic growth, adding to the sector’s uncertainty. 

Reports suggested that Washington is exploring measures such as tariffs on remote IT workers, higher levies on remittances, and tighter restrictions on the H-1B visa program. Senior White House trade advisor Peter Navarro amplified calls from conservative groups for taxing outsourced services like imported goods. 

Since India’s IT services industry is a key service export engine, such tariffs could increase project costs, disrupt outsourcing contracts, and squeeze margins of Indian firms. This combination of policy risk and macroeconomic concerns led to today’s fall in IT stocks.

All Stocks in the Nifty IT pack were in Red - TCS and Infosys Share Price Down 

Persistent Systems share price fell over 3% on Friday, marking its highest intraday fall in the last one month. However, the stock is still 23% above its 52-week low.

The decline in Persistent Systems was followed by Mphasis, whose share price dropped 3.51% to an intraday low of ₹2,760.80, near its 50-day EMA. The stock, however, continues to trade above all its long-term exponential moving averages.

Coforge also slipped by over 2%, while India’s largest IT exporter, TCS, declined 2%, and the second-largest IT services provider, Infosys, fell 1.59%.

HCL Tech, LTIMindtree, Tech Mahindra, Oracle Financial, and Wipro were all trading in the red. None of the Nifty IT index constituents were trading higher, as the index slipped over 2% to an intraday low.