IT stocks under pressure: Nifty IT slips 2% ahead of Fed's policy decision

At close, among the 10 constituents on the index, 7 declined with Tech Mahindra down over 2 per cent, LTIMindtree, Tata Consultancy Services (TCS), Infosys, Persistent Systems down over 1 per cent

Information technology (IT) stocks were under pressure in Wednesday, March 19, 2025, with Nifty IT shedding 2.2 per cent, logging an intraday low at 35,804.6. 

 

At close, among the 10 constituents on the index, 7 declined with Tech Mahindra down over 2 per cent, LTIMindtree, Tata Consultancy Services (TCS), Infosys, and Persistent Systems down over 1 per cent. 

 

The weakness in the IT space came ahead of the Federal Reserve's policy decision due later today. Further, investors will await Fed chair Jerome Powell's speech amid soft economic data but uncertainty around US President Donald Trump's tariff imposition. 

 

The US central bank will also share its quarterly updates on rate expectations, as well as their outlook for gross domestic product (GDP), inflation and unemployment. 

 

Reports suggest the Fed is expected to hold its benchmark interest rate steady in the 4.25 per cent to 4.5 per cent range. 

 

As per reports, Trump intends for new reciprocal tariff rates to take effect on April 2, the White House said on Tuesday, despite earlier comments from Treasury Secretary Scott Bessent that indicated a possible delay in their activation.

 

Meanwhile, the US consumer price index (CPI) rose 0.2 per cent in February, the smallest gain since October, putting the annual inflation rate at 2.8 per cent.

 

Other than that selling in tech-related megacap stocks in the US also contributed to denting sentiments. 

 

Alphabet fell 3 per cent after the company said it would buy Wiz for about $32 billion in its biggest deal as the Google parent doubles down on cybersecurity. 

 

Nvidia declined 2.3 per cent. The company is expected to reveal details of its latest AI chip at its annual software developer conference. 

 

Tesla fell 4.2 per cent after brokerage RBC trimmed its price target on the EV maker's stock, flagging the company is losing market share in China and Europe. 

 

Other megacaps slid, with Amazon.com losing 1.8 per cent and Meta down 4.3 per cent.

 

On Tuesday, the Wall Street indices ended lower with Dow Jones down 0.62 per cent, S&P 500 down 1.07 per cent and Nasdaq down 1.71 per cent. 

 

As per reports, global brokerage Citi has taken a cautious stance on Indian IT stocks as it sees that the valuations are high at 24x forward, despite a 16 per cent fall in calendar year 2025. 

 

Further, the brokerage expects FY26 revenue growth at 4 per cent and is cautious on the margin improvement front.