Business · India Bureau
Nifty IT index plunges 4% as rate hike concerns weigh
Technology stocks faced sharp selling pressure on Monday as investor concerns over potential US Federal Reserve rate increases triggered a broad-based selloff across India's IT sector. The Nifty IT index declined 4%, with individual IT stocks registering losses between 5% and 9%.
LSN India ·
India's information technology stocks came under significant pressure during Monday's trading session, reflecting growing anxiety among investors over the possibility of fresh rate hikes by the US Federal Reserve. The Nifty IT index fell 4% as market participants reassessed valuations in light of global monetary policy concerns. Weakness in the IT sector, which derives a substantial portion of its revenues from the United States, underscores the sensitivity of Indian technology companies to shifts in US economic policy.
Among the worst-performing stocks in the basket was Coforge, which emerged as the day's biggest loser with an 8.7% decline from opening levels. The broader selloff saw most IT stocks recording double-digit losses, with declines ranging between 5% and 9% across the sector. This widespread weakness suggests that investor concern about US interest rates is affecting the entire technology space rather than being confined to specific companies.
The selloff reflects a recalibration of expectations regarding the Federal Reserve's future policy stance. Any increase in US borrowing costs typically impacts Indian IT companies' profitability and growth prospects, particularly given their significant exposure to dollar-denominated revenues. Market analysts pointed to the correlation between global interest rate expectations and domestic technology stock valuations as a key factor driving Monday's decline.