Nifty IT Falls 625 Points on August 31 as Global Tech Selloff Hits Infosys and TCS

MUMBAI – Infosys opened Monday’s session under selling pressure that never relented, and by the time the closing bell sounded, the Nifty IT index had recorded its worst single-session loss in six weeks. The index shed 624.80 points, or 1.79 percent, to settle at 34,218.50 on August 31 — a decline that stripped away the better part of the gains that India’s technology sector had accumulated through August.

The trigger was external rather than domestic. US technology stocks had sold off sharply in Friday’s New York session after a major American enterprise software company revised its annual guidance downward, citing slower-than-expected corporate IT budget allocation in the second half of the year. That reading landed directly on Indian IT exporters, which derive between 60 and 80 percent of revenues from North American clients. By 9:25 a.m. Monday in Mumbai, futures on the Nifty IT index were already pricing in a decline of nearly 1.5 percent before the cash market even opened.

Infosys bore the largest single-name impact on the index, falling 2.34 percent to 1,872.60 rupees. The Bengaluru-based software exporter has the second-largest weight in the Nifty IT index after TCS, and its move amplified the benchmark’s decline at nearly every point in the session. Analysts following Infosys noted that the stock was already trading near the upper boundary of a fair-value range several institutions had established before the selloff, making it an easy target for profit-taking once the sector tone turned negative.

Tata Consultancy Services dropped 1.98 percent to 3,624.80 rupees, erasing gains it had accumulated during Thursday and Friday’s domestic sessions. TCS remains the largest constituent by market capitalisation inside the Nifty IT index, and its daily moves carry outsized influence on the headline reading. The company’s September quarter outlook, which will be disclosed when management meets analysts in early October, is the next substantive inflection point for the stock. Until then, the price is hostage to whatever direction US technology sentiment travels.

Wipro, often described as the most US-enterprise-exposed of the large Indian IT names relative to its size, fell 2.23 percent to 278.40 rupees, matching Infosys as the second-worst performer among large caps on a percentage basis. Wipro has struggled to sustain the revenue-growth momentum it demonstrated in late 2025, and Monday’s selloff arrived at a moment when the stock had been attempting to establish support around 285 rupees. That level failed, and the close below it opens the door to a test of the 270–272 range that acted as a floor through much of June.

HCL Technologies declined a more moderate 1.19 percent, reflecting its relatively higher proportion of infrastructure-management and engineering-services revenue, which tends to track longer contracts and is less directly exposed to the kind of discretionary IT-spend deferral that enterprise software guidance revisions signal. The company’s revenue mix has been a deliberate portfolio management choice by management, and Monday’s relative resilience was a small vindication of that strategy.

Tech Mahindra was the Nifty IT index’s best performer on the day in relative terms, falling only 0.62 percent to 1,512.80 rupees. The company, which has been executing a multi-year restructuring under Chief Executive Mohit Joshi, saw its shares supported by buy-side conviction that the restructuring benefits will outrun near-term demand headwinds. LTIMindtree shed 1.38 percent, while mid-cap names Mphasis and Persistent Systems each logged declines in the 1.25–1.69 percent range.

The broader context for Monday’s decline is a Nifty IT index that had already delivered a complicated August. The index gained as much as 3.4 percent in the first three weeks of the month as rupee stability and favourable commentary from US clients gave Indian IT stocks a lift. Monday’s retreat alone erased approximately 1.8 percentage points of that gain, leaving the index’s August performance at roughly 1.2 percent in positive territory for the month — a more modest result than the intra-month readings had suggested.

Foreign portfolio investors were net sellers of Indian technology stocks on Monday, offloading an estimated 1,240 crore rupees on a gross basis. That reading was the flip side of the banking sector’s FPI buying, suggesting that global funds executed a sector rotation within their Indian equity allocations on the final day of August — reducing technology exposure and adding financial-services weight simultaneously.

Domestic institutional investors provided partial cushion, buying approximately 810 crore rupees of IT-sector equities through the session. Their buying was concentrated in the larger-cap names — primarily TCS and Infosys — consistent with the pattern of domestic funds using price weakness in large-cap technology to add at more attractive valuations rather than chasing the move downward.

The Indian rupee’s behaviour added a further layer of complexity. The rupee ended the session little changed against the dollar at around 83.72, meaning the currency translation did not provide the natural hedge that a weaker rupee would ordinarily offer to dollar-denominated IT revenue companies. Had the rupee weakened by 0.5 percent on the day, as it might have during periods of global risk-off in 2023 or 2024, the Nifty IT decline would have been measurably smaller. The rupee’s relative stability, driven by Reserve Bank of India intervention, removed a buffer the sector has historically relied upon.

What happens to the Nifty IT index through the first week of September depends substantially on whether the US enterprise spending concern that triggered Monday’s selloff proves to be isolated — one company’s revised guidance in one quarter — or the first signal of a broader demand reassessment. That distinction will not be knowable until more American technology firms report second-quarter earnings and management commentary in the weeks ahead. Indian IT stocks are, for now, trading on an uncertainty they cannot resolve from their own disclosures.

Amanda Graham

Amanda Graham is a journalist at The Eastern Herald covering economy, politics, business, and current affairs from around the world.