Even as the Indian stock market witnessed a significant selloff on Monday, the IT sector was particularly hit. HCL Tech was the biggest loser on the BSE Sensex with its shares declining by 3.36 per cent, followed by TCS (down 3.03 per cent), Infosys (down 2.83 per cent), and Tech Mahindra (down 2.42 per cent).

Among the 30 Sensex shares, four out of the five worst-performing stocks on Monday were IT sector companies.

Shares of HCL Tech on Monday closed at Rs 1,643.7 apiece on the BSE, the TCS stock was down to Rs 3,671, Infosys was lower at Rs 1,763.8, and Tech Mahindra fell to Rs 1,609.85 apiece.

The BSE Sensex on Monday tumbled by 856.65 points to settle at 74,454.41, while the NSE Nifty slumped by 242.55 points to 22,553.35.

Why Were IT Stocks Down Today?

The IT sector was the worst-performing segment in the Indian stock market on Monday as the US market witnessed a sharp dent in the previous trade due to inflation concerns amid Trump tariffs. US markets had ended significantly lower on Friday.

The consumer sentiment in the US hit a 15-month low as inflation in America is expected to rise due to additional tariff measures.

The US is the world’s largest economy and its troubling sign is a worry for India’s export-driven sectors, particularly IT.

The latest data, which points to a stagflation situation in the US indicating slowing growth and rising prices, is a drag for the IT sector, which is heavily dependent on the US market.

US markets tumbled on Friday, extending their selloff in the wake of dour economic reports and closing the book on a holiday-shortened week fraught with new tariff threats and worries of softening consumer demand. The Dow Jones Industrial Average fell 748.63 points, or 1.69%, to 43,428.02, the S&P 500 lost 104.39 points, or 1.71%, to 6,013.13 and the Nasdaq Composite lost 438.36 points, or 2.20%, to 19,524.01.

What IT Sector Says

Lobby grouping Nasssom’s President Rajesh Nambiar on Monday said the US, which is the largest market for the $282-billion Indian IT sector, is a “wild card" for the industry.

Speaking to reporters, Nambiar said the tariff threats by the US may turn out to be the biggest headwind for the sector.

“Broadly, if you were to look at the headwinds, the biggest unknown there would be the tariffs and the impact of what happens in the US market," Nambiar said.

He was quick to add that one should not forget that the US contributes 60-62 per cent of the revenues for the sector.

“It is a bit of a wild card at this point of time. We do not know what is going to be in store," Nambiar said.

It can be noted that since assuming office on January 20, President Donald Trump has threatened to impose reciprocal tariffs with the intent of strengthening the American economy.

Speaking at Nasscom’s annual NTLF event earlier in the day, the country’s second largest IT services exporter Infosys’ chief executive and managing director Salil Parekh said the Indian IT sector should not fear the Trump impact.

According to Bajaj Broking Research, “From February 24 to 28, 2025, Investors will closely monitor the US PCE inflation data, which could shape expectations around the US Fed’s rate cut timeline, impacting global liquidity flows. On the domestic front, the monthly F&O expiry on February 27 may lead to short-term volatility, while key macro indicators like GDP growth data for Q3 FY25 and fiscal deficit numbers will provide insights into economic momentum."

With global uncertainties and domestic resilience in play, the market is likely to witness uncertainty with opportunities in selective sectors, it added.