Coforge, Wipro, Tech Mahindra, Infosys, HCL Tech shares fall in early deals; here's why

IT stocks such as Coforge Ltd, Mphasis, Wipro, Tech Mahindra, Infosys, HCL Technologies, Persistent Systems, BirlaSoft, Tech Mahindra and LTIMindtree slipped up to 4% on Tuesday after Trump administration’s 25% tariffs on Mexico and Canada came into effect from today, with China facing an additional 10% tariff on the same date. China is already facing 10% tariff on export of goods to US. 

The tariffs came into effect from today amid fears of a slowing US economy and rising inflation. Trade war now seems all but imminent with Canada retaliating with 25% tariffs on $150bn worth of US goods. The impending trade war threatens to weaken global economic growth and affect demand for the services of the Indian IT majors in the US and overseas. The BSE IT index was the top sectoral loser in today’s correction, crashing 759 points to an intraday low of 36,153 against the previous close of 36,153. 

Shares of Coforge slipped 2.39% to Rs 7180 against the previous close of Rs 7,356.50. Market cap of the IT firm slipped to Rs 48,836 crore. 

Mphasis stock fell 3.62% to Rs 2183.75 against the previous close of Rs 2265.40 on BSE. Market cap fob the firm slipped to Rs 43,000 crore. 

Wipro (1%), Tech Mahindra (1%), Infosys (2%), HCL Technologies (2.25%), Persistent Systems (4%), BirlaSoft (over 1%), Tech Mahindra (4.28%) and LTIMindtree (3.6%) were the other losers on the BSE IT index. 

Nifty IT index too fell 817.45 pts to 36,797 against the previous close of 37,614

“Inflation in the US has pushed out Fed rate cut hopes and dragged consumer confidence in the US. Such uncertainty is anathema to IT Services demand,” said JM Financial.   

“In our recent interactions with IT Services players, we picked up sporadic instances of pause in transformation programs by large US banks. This, if spreads, could put Street’s (and ours) FY26 growth estimates at risk. Our estimates and price targets are unchanged for now as we seek more evidence. But will advise flight to safety, that is, stocks with earning resilience and valuation buffer. TCS/INFO tick those boxes,” said the brokerage.