After strongly rising in morning trade, the Nifty IT index pared significant gains to close only marginally higher at 32,740.85. This comes as US dollar weakened, after China announced that it will increase its tariffs on US to 125 percent from 84 percent.
Shares of IT companies had sharply surged in the morning after President Trump paused his tariffs on trading partners for 90 days, easing concerns over a potential US recession and possible delays in clients' IT budgets.
The rise in the stock prices had pushed the Nifty IT index higher by nearly 1.3 percent in early trade. However, the stocks later tumbled during the day as US-China trade war intensified.
The dollar slid to its lowest in 10 years against the Swiss franc and a six-month low against the yen as investors sought other safe haven assets.
Coforge shares, which were the top gainer on the index in the morning, saw the sharpest intraday fall in the pack. The stock erased all gains and closed in the red at Rs 6,311 apiece. TCS shares also closed in the red with marginal losses at Rs 3,238 apiece. The fall in the stock price comes after the company posted a net profit of Rs 12,224 crore in Q4 FY25, missing estimate. This marked a fall of nearly 2 percent from the net profit reported in Q4 FY24.
Persistent and LTI MindTree shares were the top gainers on the index, closing nearly 3 percent higher. Mphasis and Wipro shares followed, trading over 2 percent higher each. Infosys, Tech Mahindra and HCL Tech shares erased significant gains to close in the green marginal higher.
The IT sector has been one of the worst-hit in this global market rout as these companies derive major portions of their revenue from the American market. The Nifty IT index crashed over 10 percent between April 2 and April 9.
However, Trump announced the temporary pause on tariffs on April 9, providing much needed relief to Wall Street, and also eased recession fears, with Goldman Sachs rescinding its recession prediction, a move that is seen as a positive cue for the IT sector.
Trump had unveiled a slew of reciprocal tariffs on April 2, with India being charged 26 percent tariff on its US exports. This sent global markets to a spin, with Indian stock markets being no exception. Apart from a global economic slowdown, the tariffs also increased concerns over a possible US recession. Goldman Sachs had earlier predicted 65 percent chance of the US going into a recession in the next 12 months.
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