Information technology (IT) shares today
Shares of information technology (IT) companies were under pressure falling up to 2 per cent on the National Stock Exchange (NSE) in Thursday’s intra-day deal tracking losses in the US markets, which ended sharply lower overnight after the Federal Reserve signalled a more hawkish outlook on interest rates.
Infosys, Tata Consultancy Services (TCS), HCL Technologies, Wipro, Tech Mahindra and Persistent Systems were down in the range of 1 per cent to 2 per cent in intra-day deals. However, Coforge, Mphasis and LTM recovered from their intra-day lows and quoting higher up to 1 per cent on the NSE.
At 10:18 AM, the Nifty IT index was the top loser among sectoral indices, down 1 per cent, as compared to 0.10 per cent rise in the Nifty 50. IT index fell nearly 2 per cent to 28,262.65 in intra-day deals. The Nifty IT index hit a 52-week low of 27,078 on May 14, 2026.
However, in the past three trading days, IT index outperformed the market and gained nearly 4 per cent, as against 2 per cent upward movement in Nifty 50, till Wednesday.
Despite the mild recovery from recent lows, in the past six months, the Nifty IT index underperformed the market by plunging 27 per cent, as compared to 6.6 per cent decline in the Nifty 50. CATCH STOCK MARKET UPDATES LIVE
US Fed rate decision
The US Federal Reserve kept the rates unchanged as widely expected but signaled 1 rate hike by the end of this year. The US central bank decided to maintain rates at 3.5 per cent to 3.75 per cent approved on 12-0 vote, fourth consecutive meeting with no change. Half of the FOMC members indicated that it may be necessary to raise rates this year, signaling growing concerns about inflation above central bank’s target. On the data front Fed revised down its projections for GDP and unemployment rate but increased the inflation expectations. It expects core inflation to rise to 2.3 per cent this year and 2.5 per cent in 2027.
While the Fed kept interest rates unchanged, its updated projections signalled that inflation remains persistent and policy rates could stay higher for longer, pushing the US bond yields higher and triggering profit-taking across global equities.
Brokerages view
The US Federal Reserve rates are likely to remain unchanged in the next meeting as Fed will monitor the upcoming economic data and see how economy evolves before taking any further decision. Labor market has steadied giving more importance to inflation data now. Previously softening labor market was seen as constraint on keeping rates at elevated level, even if inflation continued to run above Fed’s target but the recent job data has shifted the image and chances of keeping rates at elevated levels have gone up. Policy debate within Fed has started changing its course from cutting rates to signaling possible rate hike, ICICI Securities said in a note.
“The Federal Reserve’s decision to maintain rates unchanged for a fourth consecutive meeting was widely expected, but the updated projections reinforce a ‘higher-for-longer’ interest rate environment. The division among policymakers, with half still anticipating at least one more rate hike this year, along with elevated inflation forecasts and slower GDP growth, reflects the Fed’s ongoing focus on controlling price pressures even if it moderates economic growth,” said Rajesh Palviya, Head of Research, Axis Direct. READ | Textile Stocks alert: Gokaldas, Indo Count, Himatsingka, Kitex rally up to 6%
“The hawkish message sent by the new chief of the Fed, Kevin Warsh, was a bit unexpected since Warsh has been in favour of rate cuts and that was what President Trump wanted. But the persistently high inflation in the US left the FOMC with no choice but to send a hawkish message. The dot plot indicates rate hike, possibly in October. The US 10-year bond yield rose to 4.46 per cent leading to a sell-off in the US markets towards the close,” Dr. VK Vijayakumar, Chief Investment Strategist, Geojit Investments said.
Meanwhile, Anthropic’s Claude Fable 5 raises the risk of revenue deflation for Indian IT services companies, those with significant exposure to application development & maintenance (ADM) services. Fable 5 & Mythos 5 deliver substantially stronger software engineering capabilities. Anthropic believes AI-generated code quality is now approaching human levels & could surpass it within the next year.
For IT services firms, the key concern is that productivity improvements in software engineering are occurring much faster than in non-software domains. This increases the risk of lower effort requirements, reduced billing volumes, and pricing pressure for traditional application development and maintenance contracts, according to Sumit Pokharna, SVP-Fundamental Research, Kotak Securities.
As a result, companies with larger exposure to application services may face greater disruption than peers focused on infrastructure, cybersecurity, engineering services, or BPO. The pace at which enterprises integrate AI models into software delivery workflows will be the key factor determining the magnitude of disruption for the IT services industry over the next three years, the brokerage firm said on recent IT index decline. ============================================= Disclaimer: View and outlook shared on the stock belong to the respective brokerages and are not endorsed by Business Standard. Readers discretion is advised.
