IT stocks tumble 9% on Trump reciprocal tariffs
The move is expected to impact India's exports to the US. However, the Trump administration has not said anything specific to the IT sector.
PTI
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NEW DELHI: : Shares of information technology (IT), including Infosys, Tech Mahindra, and TCS came under heavy selling by plunging up to 9 per cent on Thursday after the US President Trump announced reciprocal tariffs on about 60 countries globally, including India.
The move is expected to impact India's exports to the US. However, the Trump administration has not said anything specific to the IT sector.
On the BSE, the scrip of Persistent Systems plunged 9.2 per cent to Rs 4,828.60 apiece, Coforge declined by 6.7 per cent to Rs 7,240, KPIT Technologies decreased 6.4 per cent to Rs 1,228.30, and Tata Consultancy Services (TCS) went lower by 3.39 per cent to Rs 3,425.
Mphasis' shares declined 4.5 per cent to Rs 2,364, Mastek by 3.5 per cent to Rs 2,111, Tech Mahindra by 3.3 per cent to Rs 1,377.25, HCL Technologies by 3.4 per cent to Rs 1,474.20.
On the other hand, Infosys' stock slipped 3.2 per cent to Rs 1,500.35, Wipro by 3.05 per cent to Rs 255.60, and Cyient by 3 per cent to Rs 1,213 apiece on the exchange.
Tech Mahindra, HCL Technologies, TCS and Infosys were the major laggards in the 30-share BSE Sensex firms.
The BSE IT Index tanked 1,242.44 points or 3.49 per cent to trade at 34,399.72. The 30-share BSE Sensex declined 305.76 points or 0.40 per cent to trade at 76,311.68.
The US administration has announced 27 per cent reciprocal tariffs on India, saying New Delhi imposes high import duties on American goods, as the Donald Trump administration aims to reduce the country's trade deficit and boost manufacturing.
VK Vijayakumar, Chief Investment Strategist, Geojit Investments, said, "The worse-than-expected reciprocal tariffs announced by President Trump will have a negative impact on markets globally." Vijaykumar further said the biggest concern is that this will trigger retaliatory tariffs from other countries, resulting in a full-blown trade war, impacting global trade and global growth.
Higher inflation in the US will put the Fed in a tight spot, it would be difficult for the Fed to deliver the rate cuts expected by the market in 2025. The probability of a US recession by the end of 2025 has increased. This is bad news for the global economy and markets, he added.
According to the market experts, IT service providers worry that the trade war initiated by the US administration will probably hurt Indian companies' appetite for their services.