TCS, Infosys, Other IT Stocks Slide Up To 6% On Trade War Fears And Slowing US Economy – News18
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Indian IT stocks saw a steep decline as worries over a slowing US economy and rising inflation expectations, spurred by Trump’s tariffs, dampened investor sentiment
IT Stocks Decline
Indian IT stocks saw a steep decline on Friday as worries over a slowing US economy and rising inflation expectations, spurred by Trump’s tariffs, dampened investor sentiment. The release of higher-than-expected US jobless claims data further fueled fears of economic slowdown.
The Nifty IT index fell more than 4%, with Tech Mahindra leading the drop, down nearly 6%. Mphasis, Persistent Systems, Wipro, LTIMindtree, and Infosys each lost 4-5%, while TCS, HCL Tech, and Coforge saw declines of 3-4%.
The US Labor Department reported a surprise increase in initial jobless claims, rising by 22,000 to a seasonally adjusted 242,000 for the week ending February 22, marking the largest jump since October. This rise was attributed to snowstorms and the Presidents’ Day holiday, though experts caution that further layoffs could emerge in the coming weeks.
Compounding the market’s woes, most Asian markets traded lower, with the MSCI Asia ex-Japan index dropping 1.21%, mirroring losses on Wall Street. A significant plunge in Nvidia’s shares following its earnings report triggered a broader sell-off in AI-driven and mega-cap tech stocks, putting further pressure on the IT sector.
The broader Indian market was also affected. The BSE Sensex plummeted 1,000 points, or 1.34%, to 73,602, while the Nifty50 dipped to 22,270 by 10 a.m. The market capitalization of all BSE-listed companies fell by Rs 7.16 lakh crore to Rs 385.94 lakh crore.
On February 27, President Trump announced that his proposed 25% tariff on Mexican and Canadian goods would take effect on March 4. He also introduced an additional 10% tariff on Chinese imports, citing the ongoing flow of dangerous drugs into the U.S. These new tariffs are in addition to the 10% levy on Chinese goods imposed earlier this month, bringing the total tariff on Chinese imports to 20%.
Dr. V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, noted that stock markets generally dislike uncertainty, which has been rising ever since Trump’s election. “The series of tariff announcements by Trump has impacted markets, and the latest 10% tariff on China confirms the view that Trump will use the early months of his presidency to threaten countries with tariffs and then negotiate settlements favorable to the U.S.,” he said.
Prashanth Tapse, Senior VP (Research) at Mehta Equities, highlighted that Trump’s 25% tariff on EU imports and Nvidia’s mixed quarterly results are key negative catalysts weighing on investor sentiment.
Kranthi Bathini, Director of Equity Strategy at WealthMills Securities, added, “There is no relief from foreign outflows, which is adding pressure on the markets. Additionally, global cues remain negative, with both Asian and U.S. markets under pressure and profit booking affecting broader equity markets.”