Nifty IT tumbles 4% as Trump's reciprocal tariffs spark growth concerns; Mphasis, Coforge crash up to 10%

Over the past six months, the Nifty IT index has cracked 15 percent in trade.

The Nifty IT sank over four percent on April 3, after U.S. President Donald Trump imposed a broad-based tariff of 26 percent on all Indian exports.

Shares of IT services players, that depend on U.S. deals for a large portion of their revenue, crashed sharply, with giants like Infosys, TCS, HCL Technologies leading the losses on the Nifty 50 index.

The information technology gauge Nifty IT tumbled 4.21 percent by the end of the trading session today. On the IT index, mid-cap tech services players such as Persistent Systems and Coforge fell by 8 to 9 percent while Mphasis fell over 4 percent.

The sell-off comes amid concerns of sales growth, as these IT players depend on services exports to the U.S. for a large portion of their revenue. Following the imposition on the tariffs, deal wins from America-based clients are likely to slow down, impacting the topline of these firms.

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On April 2, U.S. President Donald Trump unveiled global reciprocal tariffs at an event at the White House. For India, the President announced 26 percent 'kinder' reciprocal tariffs. Despite US being a significant trading partner of India, Trump has termed the latter as a “tariff king” and “tariff abuser”.

International brokerage Morgan Stanley suggested that global macroeconomic shifts and technological changes pose rising risks to the domestic information technology sector, potentially impacting valuations and revenue growth.

Given the negative sentiment, IT stocks have been underperforming on fears on US growth slowdown impacting the Indian tech industry. Fears of tariffs have resulted in a broad-based sell-off in the IT index, the Nifty IT gauge has slumped six percent over the past month, nosediving 15 percent over the past six months to wipe of crores in investor wealth.

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