IT shares fall after two days on US economic data as Persistent, TCS lead losses, but CLSA sees opportunity

IT shares see profit booking in trade.

• Nifty IT index fell 1.3 percent, erasing gains from earlier this week.
• Persistent Systems, TCS, and Coforge declined up to 2 percent.
• CLSA sees buying opportunity despite sector's 12.5 percent drop in 2025.

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The domestic information technology (IT) shares on Wednesday gave up their two-day gains, tracking weak US economic data and ahead of key jobs numbers later in the day.

The Nifty IT index declined up to 1.3 percent, erasing gains of 0.32 percent recorded between Monday and Tuesday. All 10 constituents of the index were trading in the red.

Persistent Systems was the top loser, falling over 2 percent. Tata Consultancy Services and Coforge also declined up to 2 percent. HCL Technologies and Infosys were among other laggards.

The decline in IT shares followed softer-than-expected US retail sales data, which raised concerns about demand in the sector’s largest revenue-generating market. Investors also remained cautious ahead of the monthly US jobs data.

Despite the recent decline, brokerage CLSA said the correction offers an additional buying opportunity in Indian IT stocks.

The sector has fallen 12.5 percent in 2025, emerging as the biggest drag on benchmark indices, which have underperformed Asian and emerging market peers. The decline was driven by record foreign outflows of about Rs 70,550 crore, muted corporate earnings and continued weakness in US client spending.

The pressure has extended into 2026, with the IT index down 7 percent so far amid concerns that advances in artificial intelligence, including new tools from US-based Anthropic, could compress software development cycles.

CLSA, however, downplayed the risk of near-term disruption, saying enterprise technology ecosystems typically take years to adapt to new innovation cycles.

The brokerage said that while the sector has faced multiple disruptive narratives in the past, earnings have rarely seen lasting damage.

CLSA has maintained a preference for mid-tier players Persistent Systems and Coforge, citing their agility to capture emerging profit pools in the next technology cycle.

(With inputs from Reuters)

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