Nifty IT slides 4.7% as TCS sinks 7% after rally

What happened in Wednesday’s trade

Information technology (IT) stocks came under sharp selling pressure on Wednesday, snapping the sector’s recent recovery rally. The weakness was broad-based across large-cap and mid-tier names, with several heavyweights turning into key drags for the wider market. In early trade, the Nifty IT index plunged about 4.66% to 4.67%, making it the worst-performing sectoral index on Dalal Street by a wide margin.

The drop followed a strong move the previous day, when the sectoral index had surged more than 4% and logged its biggest single-day gain of the year. Wednesday’s reversal highlighted how quickly sentiment can shift in IT counters after a fast rally, especially when investors move to lock in gains.

Stocks that led the sell-off

Tata Consultancy Services (TCS) led the decline. In one read of the session, TCS fell 7.12%, and another update put the fall at 7.16%, making it the biggest loser among Sensex stocks. Infosys also slipped meaningfully, with moves reported at 4.02% and 3.80% in different snapshots of the same sell-off.

The pressure extended beyond the top two names. Coforge dropped 4.31% in one update, while other trading notes flagged it around 3% lower at one point. LTM (formerly known as LTIMindtree) tumbled 6.79%, and Persistent Systems cracked 5.29% in Wednesday’s slide.

Among other major IT counters, Tech Mahindra, HCL Technologies and Mphasis were also lower. Declines were reported at 4.93%, 3.66% and 3.34%, respectively, in one snapshot, while another update cited Tech Mahindra down 4.54% and HCL Technologies down 3.65%.

Profit booking after a short rally

Market commentary around the move pointed to profit booking after a two-day rally in IT stocks. The timing mattered: the Nifty IT index had jumped more than 4% a day earlier, and Wednesday’s drop came soon after that surge. When a sector delivers a sharp one-day rebound, traders often reduce risk quickly, particularly in stocks that had just led the upswing.

The scale of Wednesday’s move underlined that this was not a single-stock event. The sectoral index itself did much of the talking, with a fall of around 4.66% to 4.67% in early trade.

Fresh 52-week lows add to the pressure

The sell-off also coincided with reports of Indian IT majors, including Infosys and TCS, falling up to 5% and hitting fresh 52-week lows in a separate session that dragged the Nifty IT index down about 4%. That context is important because fresh lows can trigger additional selling, including stop-loss activity and further risk trimming.

In that session, TCS and Infosys were cited falling around 4% to lows of Rs 2,292 and Rs 1,131.6, respectively. Persistent Systems fell 4.75% to an intraday low of Rs 4,855.

Currency and global cues in the background

Another layer of context came from macro and global market signals. One update noted that the Nifty IT index slumped about 4% on a day when the Indian rupee hit a fresh lifetime low by breaching 95.50 against the US dollar. The same note highlighted that Wall Street had rallied to new record highs, driven by a tech-led surge.

These cross-currents can make price action in Indian IT stocks more complex. Even when global tech is strong, domestic sector moves can be dominated by positioning, local risk appetite, and index-level flows.

A volatile stretch for the sector

The sharp Wednesday fall fits into a broader pattern of high volatility in IT names over multiple sessions. On one Friday morning, the Nifty IT index plunged 2.68% to trade near the 30,780 level, marking a sharp single-day retreat. That rout was linked to a reaction to TCS Q4 earnings, with disappointing revenue data cited as a key trigger. At 11:08 AM IST in that session, the Nifty IT index was down 2.68% at 30,788, and TCS was down 3.28% to 2,503.

In another bout of weakness, the Nifty IT index was reported down 4.59% or 1,520 points to 31,639 at 9:50 am, with Infosys down 6.13% to 1,299 and TCS down 4.77% to 2,619.

AI disruption fears and rate-cut expectations

Beyond day-to-day price action, the sector has also faced broader narrative headwinds. Separate market updates linked IT stock declines to concerns over AI disruption in traditional IT services, and to fading expectations of an early interest rate cut by the US Federal Reserve.

In February, the Nifty IT index fell 1.5% in intra-day trade on a day when all constituents were in the red, with the decline linked to US tech weakness and concerns around AI disruption. Another report said the IT index declined 4.75% on February 13, extending weekly losses to 10.8%, and noted it was set for its worst week since March 2020.

Key numbers at a glance

Market impact and why it matters

Wednesday’s fall showed how quickly leadership can reverse in a sector that had just staged a recovery rally. With the Nifty IT index dropping about 4.66% to 4.67%, the move was large enough to stand out even in a market that routinely sees rotations between sectors. The declines in TCS, Infosys, Tech Mahindra and HCL Technologies were also significant because these companies carry heavyweight representation in benchmark indices.

Separate sessions referenced fresh 52-week lows in IT majors and sharp index-level drops tied to earnings reactions, macro signals such as a weaker rupee, and shifting expectations around AI and US rates. Together, these updates frame a market environment where IT stocks are reacting not only to company-specific developments, but also to rapid changes in sentiment and positioning.

Conclusion

IT stocks saw a sharp pullback on Wednesday, with the Nifty IT index down about 4.66% to 4.67% and TCS leading losses with a fall of around 7%. The drop came immediately after the sector logged its biggest single-day gain of the year, pointing to profit booking after a short rally. With recent sessions also flagging fresh 52-week lows and other sharp index-level swings, investors will continue tracking earnings-related updates, global tech cues, and currency moves for the next directional signal in the sector.