The share price of IT stocks slumped after US President Donald Trump’s administration imposed 26% reciprocal tariffs on Indian imports to the US. The Nifty IT, a basket of Indian tech stocks, fell 2.5% to 35,371.55 levels.
All the constituents of the sectoral index were trading in the red. The share price of Persistent Systems cracked the most by 6.14% to Rs 4,991.25, which was followed by Coforge. Its stock price fell 3.11% to Rs 7,519.95 and Mphasis declined 2.96% to Rs 2,401.05.
The sell-off in tech stocks was so much so that the top four spots among the major losers in the Nifty 50 were with IT stocks. Bajaj Auto was the worst hit in the Nifty 50, which was followed by Tata Consultancy Services, Infosys, HCL Technologies, Tech Mahindra, and others.
TCS’ share price fell 2.7% to Rs 3,447.95, Infosys cracked by 2.7% to Rs 1,507.20, HCL Technologies slumped by 2.86% to Rs 1,483.80, and others also dropped significantly.
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Trump argued that the United States has been disadvantaged in global trade for decades. He said the tariff move was important to liberate America and revive American manufacturing. The US has imposed 26% tariffs on Indian imports in addition to 10% baseline tariffs, which Trump thinks will balance trade and mirror tariffs on U.S. goods.
2 key reasons why tech stocks are falling today?
1. Demand may shrink
One of the key reasons why tech stocks are under pressure is because of the overall perceived impact of the tariff. The fears of the global slowdown are impacting sentiment and worries about the demand outlook are gaining traction. “Tariffs unveiled by President Trump last night would bring a major realignment in global trade and manufacturing value chains. India has been placed somewhere in the middle of the tariff rates, which needs to be assessed for real impact”, said ASSOCHAM president Sanjay Nayar. The Associated Chambers of Commerce and Industry of India, better known as ASSOCHAM, is a non-governmental trade association and advocacy group.
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