The shares of IT stocks crashed on February 28 as concerns over US President Donald Trump's fresh tariff threats continued to negatively impact the market. The Nifty IT index extended losses for the seventh consecutive session, dropping over 4 percent to stand at 37,318.30. This, as data showed that US weekly jobless claims rose more than expected last week, adding to worries that the world's largest economy may be slowing, with inflation expectations surging due to Trump's tariffs.
Notably, Nvidia's Q4 results may also have added on to the impact on the IT stocks.
The shares of Tech Mahindra were the top loser on the index, falling over 6 percent to close at Rs 1,485.95 apiece. The stock has so far declined nearly 12 percent over the past one month.
It was followed by Wipro and Mphasis shares, which recorded significant losses of over 5 percent each.
LTI Mindtree and Infosys shares meanwhile tumbled over 4 percent each. The fall in Infosys' stock price significantly dragged the IT index down.
Persistent Systems, HCL Tech and TCS shares were down over 3 percent each, while L&T Technology Services and Coforge shares were down over 2 percent each.
Trump on February 27 said that his proposed 25 percent tariff on Mexican and Canadian goods would become effective from March 4 onwards. He also announced an additional 10 percent duty on Chinese imports, citing the continued flow of deadly drugs into the US. These new tariffs will be added to the already existing 10 percent levy imposed on February 4 over the fentanyl crisis, effectively raising the total duty on Chinese imports to 20 percent.
Prashanth Tapse, Senior VP (Research) at Mehta Equities said Trump's announcement of a 25 percent tariff on EU imports and Nvidia's mixed quarterly results are the key negative catalysts weighing on investor sentiment.
"There is no respite for foreign outflows, which is adding pressure on the markets at this point. Additionally, global cues remain negative, with Asian and U.S. markets under pressure and profit booking happening across the broader equity markets," said Kranthi Bathini, Director of Equity Strategy at WealthMills Securities.
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