IT Sector Sees Sharp Setback: Nifty IT Index Falls 1%, Reflecting Profit Booking Amid Global Headwinds

The Nifty IT index, which tracks the performance of India’s leading information technology firms, fell by 1% on October 17, 2025, emerging as the key laggard in the Indian stock market. The decline came despite broader market resilience, reflecting sector-specific pressures due to an uncertain global economic environment and cautious corporate earnings forecasts.

Investors reacted to a mixture of factors including recent downgrades by credit rating agencies impacting the US economy — a critical market for Indian IT exports — and disappointing revenue growth guidance from major IT companies. Infosys has lowered its revenue outlook for the current fiscal year, while TCS reported a slight dip in quarterly profit, reinforcing concerns over growth momentum.

The sell-off was broad-based across the IT sector with significant declines in heavyweight stocks such as Infosys, Tata Consultancy Services (TCS), Wipro, Tech Mahindra, and Mphasis. This retracement is partly attributed to profit booking after a period of strong sector gains earlier in the year.

Notable Updates:

Nifty IT index fell 1%, making it the largest sectoral loser on October 17.

Key IT stocks like Infosys, TCS, Wipro, Tech Mahindra, and Mphasis declined between 1-4%.

Moody’s downgrade of the US sovereign credit rating dampens sentiment given the sector’s reliance on the US market.

Infosys lowered its revenue growth guidance to 0%-3% in constant currency for FY26.

TCS reported a 1.6% year-on-year decline in Q4 net profit, though revenue grew 5.2%.

Concerns over geopolitical tensions and trade disputes add to investor caution.

Mixed earnings and muted revenue outlooks contributed to the sectoral pullback.

Market participants remain watchful for upcoming corporate earnings and global trade developments.

While the IT sector’s short-term outlook remains clouded by external challenges, its long-term growth fundamentals tied to digital transformation trends remain intact. Investors are advised to monitor key earnings reports and global macroeconomic signals closely.

Sources: Moneycontrol, Economic Times, NSE India, Tickertape