Nifty IT Index Dips 1.01% on Profit Booking and Moody’s US Credit Rating Downgrade

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On October 13, 2025, India’s Nifty IT index declined by 1.01%, weighed down by broad-based selling among major IT stocks. Investor caution was driven by concerns over Moody’s downgrade of the US sovereign rating—the largest market for Indian IT firms—and muted earnings outlooks, impacting market sentiment.

The Nifty IT index closed Monday’s session down 1.01% at 35,737.20 points, lagging behind the broader NSE Nifty 50 index which also slipped amid profit booking and global uncertainties. Selling pressure was widespread across IT majors including Infosys, TCS, Wipro, Tech Mahindra, Coforge, and Mphasis.

The key catalyst for the downturn was Moody’s downgrade of the US sovereign credit rating from AAA to AA1. The US remains a critical revenue source for Indian IT companies, and the rating downgrade raised fears of higher borrowing costs and subdued demand for IT services.

Apart from the credit rating impact, the IT sector’s weak revenue growth guidance and mixed quarterly earnings also put pressure on valuations. Companies like Infosys reduced revenue growth forecasts for FY26 citing an uncertain macroeconomic environment and cautious client spending.

Mid and small-cap IT stocks saw even sharper declines, reflecting broader market risk aversion after a sharp rally earlier in the year. Market participants remain wary given the concentrated foreign revenues and currency fluctuations affecting IT earnings.

Analysts suggest investors exercise caution and selectively invest in fundamentally strong IT firms with robust digital transformation portfolios and healthy order books.

Notable Updates

Nifty IT Index: Fell 1.01% to 35,737.20.
Major Losers: Mphasis (-2.14%), Coforge (-1.76%), Infosys (-1.64%), TCS (-1.25%), Tech Mahindra (-1.16%), Wipro (-1.05%).
US Sovereign Rating: Moody’s downgrade affects investor sentiment in IT sector.
Revenue Guidance: Infosys lowered FY26 revenue growth guidance to 0%-3% (constant currency).
Mixed Earnings: Several IT companies reported muted or below-expected Q1/Q2 results.
Currency Impact: Dollar-rupee fluctuations remain a critical variable for IT firms.
Market Sentiment: Profit booking alongside global macro risks weigh on IT stocks.

Major Takeaway

The Nifty IT index’s decline amid global credit rating changes and cautious earnings outlook underscores the sector’s sensitivity to external economic developments. Investors are advised to focus on quality companies with strong digital initiatives and risk management to navigate near-term volatility in one of India’s most globally connected sectors.

Sources: Economic Times, Moneycontrol, Motilal Oswal, NSE India, Reuters.

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