Infosys, HCLTech, Coforge tumble up to 6%: Why are IT stocks down today?

IT stocks are once again at the centre of the market sell-off, but Wednesday's decline has more than one trigger. A sharp rise in expectations of a US rate hike is hurting the sector's demand outlook, while a company-specific development at Coforge has added another layer of pressure.The Nifty IT index fell 3.06% in early trade, making it the worst-performing major sectoral index.Among the major stocks, HCL Technologies fell 3.67%, Infosys declined 3.50%, Tech Mahindra dropped 3.43% and TCS fell 2.88%. The broader IT pack was also firmly in the red, with Coforge down 5.70%, LTI Mindtree falling 2.52%, Persistent Systems declining 2.42%, Mphasis dropping 2.32% and Wipro falling 2.07%.So, why are IT stocks falling so sharply today? US RATE-HIKE EXPECTATIONS ARE BACKThe biggest sector-wide concern is the US interest-rate outlook.Stronger-than-expected US jobs data has increased expectations that the Federal Reserve could raise interest rates in September. Higher interest rates can make US companies more cautious about spending, particularly on discretionary projects. That is important for Indian IT companies because the US is a key market and a significant source of revenue for the sector.If American companies delay technology spending or become more selective about new projects, Indian IT firms can face pressure on deal wins, revenue growth and margins.The rate-hike concern has therefore hit the entire IT pack rather than just one or two companies.COFORGE, COGNIZANT DEVELOPMENTS ADD PRESSURECoforge is facing an additional company-specific trigger.The stock fell 5.70% in early trade after chairman Om Prakash Bhatt resigned following concerns raised by an internal audit over the company's board evaluation process.The sharp fall in Coforge has added to the broader weakness in IT stocks at a time when the sector is already under pressure from macroeconomic concerns.The US has suspended Cognizant's permanent labour certification filings, the first step in the process through which employers sponsor foreign workers for permanent residency, as the Trump administration intensifies its campaign against alleged visa fraud.A Labor Department official posted "Handcuffs await" while announcing the move, tied to a nationwide fraud probe that started back in July.Cognizant is one of the biggest H-1B sponsors in the US, and a federal jury has already found the company discriminated against non-Indian workers in a separate case.IT STOCKS ARE ALREADY DEALING WITH A DIFFICULT DEMAND ENVIRONMENTThe latest rate concerns come against a challenging backdrop for Indian IT.The sector has already faced a prolonged period of weak discretionary technology spending, longer deal cycles and uncertainty around how artificial intelligence will affect traditional IT services.The pressure is therefore not simply about one Federal Reserve meeting. Investors are also assessing whether higher US rates could further delay spending decisions by clients.The combination of higher rates, cautious US clients and existing concerns around IT spending is making investors more defensive towards the sector.HOW BAD IS THE SELL-OFF?The extent of the fall is visible across the IT pack.Coforge was down 5.70%, Infosys fell 3.50%, HCL Technologies declined 3.67% and Tech Mahindra dropped 3.43%.TCS declined 2.88%, LTI Mindtree fell 2.52%, Persistent Systems dropped 2.42%, Mphasis declined 2.32% and Wipro fell 2.07%.The Nifty MidSmall IT & Telecom index was also down 1.97%, showing that the selling was not limited to large-cap IT companies.The IT sell-off is also amplifying the decline in the benchmark indices because several large IT companies have significant weight in the Nifty and Sensex.At 9:29 am, the Sensex was down 533.48 points, or 0.71%, at 75,044.10, while the Nifty was down 127.25 points, or 0.54%, at 23,507.85.The IT sector's 3.06% fall therefore has a much larger impact on the headline indices than the relatively modest decline in several other sectors.The immediate trigger for IT stocks will be the US rate outlook. Any further change in expectations around the Federal Reserve's September decision could keep the sector volatile.Investors will also watch company-specific developments, particularly after the sharp fall in Coforge.The broader market is already facing other headwinds, including Brent crude near $100 a barrel and escalating Middle East tensions. But for IT stocks specifically, US rates and the resulting impact on client technology spending remain the key macro concern, while Coforge's board-related development has added a separate stock-specific trigger.Vijayakumar also believes investors should avoid blindly chasing momentum elsewhere in the market. With the Nifty's year-to-date return negative and IPO listing gains attracting substantial money, he said investors could instead look at fairly valued large-cap stocks in growth sectors.For IT investors, however, the immediate focus remains firmly on US interest rates, technology spending and whether the sector can withstand another period of cautious client budgets.(Disclaimer: The views, opinions, recommendations, and suggestions expressed by experts/brokerages in this article are their own and do not reflect the views of the India Today Group. It is advisable to consult a qualified broker or financial advisor before making any actual investment or trading choices.)- EndsPublished On: Sep 9, 2026 09:45 IST