Nifty IT Index Slides 3% as US Rate Hike Expectations Intensify

India's IT sector benchmark index contracted 3 per cent as rising expectations of additional interest rate increases by the US central bank weighed on investor sentiment. The broader technology basket experienced widespread weakness, with individual stocks registering losses ranging from 2 to 4 per cent during the trading session.

Infosys emerged as the worst performer among major IT companies, sliding 3.8 per cent as the sector grappled with concerns over potential headwinds from tighter monetary policy conditions. The software services major's underperformance reflected broader apprehensions about the impact of elevated interest rates on IT spending and client discretionary budgets.

The downturn in technology stocks mirrors a global pattern of sector rotation as investors reassess valuations in the context of higher borrowing costs. Higher US interest rates typically compress profit margins for Indian IT services firms that rely heavily on dollar-denominated revenues while managing rupee-based costs.

Market analysts attributed the selloff to positioning ahead of upcoming Federal Reserve communications, with traders calibrating their exposure to rate-sensitive sectors such as information technology. The decline underscores the persistent correlation between US monetary policy trajectories and domestic technology stock performance.