India’s IT sector continued to reel under selling pressure for the fifth consecutive session, with Infosys and other top IT stocks facing heavy losses amid concerns over weak US discretionary spending. The Nifty IT index has now officially entered bear market territory, following a steep decline in the previous session.

IT Stocks in Free Fall

Shares of major IT firms, including Infosys, TCS, Wipro, and HCL Tech, extended their losing streak as investors remained cautious about slowing demand from the US market—one of the biggest revenue contributors for the Indian IT industry.

Market experts cite subdued discretionary spending by US corporations as a key factor behind the sell-off. With rising global macroeconomic uncertainty, businesses are tightening their IT budgets, leading to concerns over revenue growth for Indian software exporters.

Nifty IT Index Hits Bear Market Zone

The Nifty IT index has now plunged more than 20% from its recent highs, officially placing it in a bear market. The sector was already struggling due to global recessionary fears and weak earnings guidance from IT companies, and the latest US spending concerns have further dampened investor sentiment.

What’s Driving the Sell-Off?

Several factors are contributing to the persistent decline in IT stocks:
✅ Weak US corporate spending: US firms are cutting down on IT investments, affecting order flows.
✅ Global macroeconomic uncertainty: Recession fears and cautious business spending in the US and Europe.
✅ Earnings slowdown: Indian IT companies have provided muted growth outlooks in their recent earnings reports.
✅ High employee costs & attrition: Despite layoffs in the global tech sector, Indian IT firms continue to face margin pressures.

Analysts Remain Cautious

Market analysts believe that IT stocks may remain under pressure in the near term unless there is a turnaround in demand. “We are seeing a prolonged weakness in IT spending, and without significant client budget expansions, a swift recovery in stock prices seems unlikely,” said a market strategist.

Should Investors Buy the Dip?

While valuations of IT stocks have become more attractive following the correction, experts caution that investors should wait for stronger signals of recovery before jumping in. Earnings reports for the next quarter and management commentary on client spending trends will be crucial in determining the future trajectory of the sector.

For now, IT investors may have to brace for continued volatility as global economic uncertainties weigh on India’s tech giants.