Athira Sethu
Kochi, 8 September 2026
Indian IT stocks will be on radar Tuesday after a sharp sell off on Monday, September 7. The NIFTY IT index, an index that tracks 10 top IT companies listed in the National Stock Exchange, saw a decline of as high as 2.3%, that is, 707 points on Monday. The index saw a fall to 29,988 intraday levels with all the 10 stocks moving in negative territory.
The NIFTY Midsmall IT and Telecom index, which tracks mid- and small-cap IT companies, also declined. This index lost nearly 1%, with 15 out of 20 stocks declining in price.
According to analysts, the primary cause of the fall in the stock market was fears regarding the US economy and the upcoming interest-rate hike by the US Federal Reserve. Such fears were heightened by US employment data for August that was higher than what the economists anticipated.
The US companies are some of the biggest clients of Indian IT companies as the US is the largest market for Indian companies. An increase in interest rates will make borrowing costly for US companies. Hence, such companies will cut down spending on non-essential items like technology.
Firms might delay their technology projects, reduce their spending on consultation services, or renegotiate their contracts with IT companies in India. Such actions could be detrimental for the future income and profits of Indian IT companies.
According to the figures provided by the US Bureau of Labor Statistics, non-farm payroll employment grew by 162,000 people in August. The unemployment rate stayed the same and reached 4.1%. The expected rise in the job market among economists, according to Reuters, was only 56,000 new jobs.
Job growth occurred in such industries as food services, local government education and manufacturing. The employment in food services and drinking places was expanded by 59,000 jobs; the number of jobs in local government education increased by 42,000. The employment in manufacturing grew by 16,000.
Among large IT companies, Infosys became the largest loser of the NIFTY IT index. Infosys stocks fell by 3.3% to ₹1,093. Besides, LTM, Mphasis, Oracle Financial Services Software, Tech Mahindra, Coforge, Wipro, HCL Technologies, Persistent Systems and Tata Consultancy Services also experienced decreases in their share price.
In the mid and small cap IT sector, Sonata Software declined by almost 4 percent to ₹274. Stocks of L&T Technology Services, Tata Elxsi, Zensar Technologies, KPIT Technologies, Tata Technologies, Hexaware, and Sagility have all fallen.
The reason for investors’ worry is the rise in US interest rates, which might affect technology expenditure and Indian IT companies.
