Nifty IT Plummets 1.43% as Fed Hawkish Tone and Weak US Demand Shake Sector: Nine of Ten IT Giants in the Red; Wipro Alone Stays Resilient
By Shishta Dutta | Published at: Jun 19, 2025 02:18 PM IST
Mumbai, 19 June 2025: The Nifty IT index witnessed a sharp downturn during mid-morning trade, plunging by 556.20 points or 1.43% to settle at 38,474.70. The decline was triggered by renewed global uncertainty following the US Federal Reserve’s firm stance on inflation, alongside a weakening demand outlook in key export markets such as the United States.
Quick Snapshot of Index Movement
| Metric | Value |
|---|---|
| Previous Close | 39,030.90 |
| Open | 38,945.35 |
| Day High | 38,966.80 |
| Day Low | 38,429.40 |
| Last Traded | 38,474.70 |
| Change (Pts) | -556.20 |
| Change (%) | -1.43% |
| 1M Performance | +4.14% |
| 1Y Performance | +12.15% |
| 52W High | 46,088.90 |
| 52W Low | 30,918.95 |
| Traded Volume | 98.38 lakh |
| Traded Value | ₹1,383.89 Cr |
Tech Selloff Accelerates as Macro Headwinds Deepen
The sharp fall followed comments from US Federal Reserve Chair Jerome Powell, who warned of “meaningful” inflation pressures ahead. This signalled a delay in anticipated rate cuts, raising concerns around US consumer spending — a vital revenue stream for Indian IT firms that rely heavily on offshore contracts.
The sector was already under pressure from muted deal pipelines and recent broker downgrades, and Powell’s statements acted as a fresh blow to investor sentiment.
Breakdown of Nifty IT Stocks (as of 11:10 AM IST)
| Stock | Last Price (₹) | Change (₹) | % Change | 1M % Chg | 1Y % Chg |
|---|---|---|---|---|---|
| Wipro | 263.13 | +1.54 | +0.59% | +3.91% | -46.82% |
| LTIMindtree | 5,260.50 | -190.00 | -3.49% | +8.57% | +7.09% |
| OFSS | 9,363.00 | -293.00 | -3.03% | +12.01% | +0.15% |
| Tech Mahindra | 1,663.20 | -47.50 | -2.78% | +7.07% | +24.75% |
| Coforge | 1,786.50 | -47.00 | -2.56% | -77.84% | -65.23% |
| Persistent | 5,879.00 | -146.50 | -2.43% | +6.28% | +56.61% |
| MphasiS | 2,643.40 | -44.00 | -1.64% | +6.03% | +11.17% |
| Infosys | 1,615.30 | -17.60 | -1.08% | +4.69% | +8.99% |
| TCS | 3,420.50 | -30.90 | -0.90% | -1.92% | -9.53% |
| HCLTech | 1,703.90 | -12.00 | -0.70% | +4.02% | +19.39% |
What Triggered the Decline?
The IT sector’s slide stemmed from a combination of global macroeconomic factors:
- No Immediate Rate Cut in the US: Recent hopes of a US interest rate reduction were quashed as Powell emphasised persistent inflation risks.
- Downgrade of Tech Mahindra: Morgan Stanley revised its rating on Tech Mahindra to “underweight,” adding pressure on the stock.
- Muted Outlook for New Deals: Both CLSA and Morgan Stanley flagged concerns about a weak deal pipeline for IT companies.
- Dampened Consumer Spending in the US: Higher living costs and tariff burdens are likely to reduce demand for non-essential services, hitting IT revenues.
- Geopolitical Tensions: Heightened unease over developments between the US and Iran also weighed on sentiment, making investors more risk-averse.
Wipro Stands Out Amid Broad Sector Weakness
Wipro was the lone gainer in the index, rising by 0.59%. This came after Morgan Stanley upgraded the stock to “equal-weight,” raising its price target to ₹265. The stock’s relative outperformance was supported by a comparatively steady demand outlook and improving operational efficiency.
Wipro’s recent agreement at the Paris Air Show to acquire a majority stake in France’s Lauak Group (specialised in aerospace manufacturing) signals a strategic deepening of its aerospace services. This move, pending regulatory approvals, will form “Wipro Lauak”, enhancing European presence and innovation. Moreover, Wipro has extended its partnership with Metro AG in Germany for cloud, data, and AI-enabled services, reinforcing its diversified business momentum. These strategic moves underpin Wipro’s resilience and could bolster confidence among global investors, even as earnings timelines remain to materialise.
Outlook: Volatility May Persist Amid Global Uncertainty
While the Nifty IT index has posted a 12.15% return over the past year and gained 4.14% in the last month, it remains 16.5% below its 52-week high. The recent correction underlines the vulnerability of the sector to global policy signals and changing demand trends.
Looking ahead, investors are expected to closely track upcoming quarterly earnings, deal announcements, and any shifts in the US macro landscape. Given the sector’s sensitivity to global developments, short-term volatility is likely to remain elevated. However, fundamentally strong firms with steady order books could offer selective opportunities in the current environment.
Disclaimer: At HDFC SKY, we take utmost care and due diligence in curating and presenting news and market-related content. However, inadvertent errors or omissions may occasionally occur.
If you have any concerns, questions, or wish to point out any discrepancies in our content, please feel free to write to us at content@hdfcsec.com.
Please note that the information shared is intended solely for informational purposes and does not make any investment recommendations
