The central bank cited persistent inflationary pressures amid rising geopolitical tensions in the Middle East and uncertainty around tariff policies.
The Nifty IT index fell 2.51% to 28,817.50 and is now down 28.50% from its 52-week high of 40,301.40.
Among major losers, Infosys and Oracle Financial Services Software dropped 2.87% each, while Coforge declined 2.83%. Tech Mahindra fell 2.74%, Mphasis slipped 2.73%, and TCS lost 2.44%. Persistent Systems declined 2.39%, Wipro fell 2.35%, HCL Technologies dropped 2.24%, and L&T Technology Services eased 1.19%.
The weakness in IT stocks comes as the sector derives a significant portion of its revenue from the US market. Elevated inflation raises concerns of reduced discretionary spending, which could impact demand for IT services and pressure margins. Additionally, interest rate decisions influence currency movements, particularly the dollar, which has a direct bearing on IT companies’ earnings.
The Federal Reserve kept its benchmark rate unchanged in the range of 3.50% to 3.75%, while signalling a cautious outlook. Policymakers now expect inflation to stand at 2.7% by year-end, higher than the 2.4% projected earlier, reflecting the impact of rising oil prices and tariff-related pressures.
The central bank projected steady unemployment at 4.4% and indicated only one rate cut this year. Economic growth was marginally upgraded, with GDP expected to expand 2.4% in 2026 compared with the earlier estimate of 2.3%.