Infosys, Tech Mahindra, HCL Tech shares fall over 2%: IT index plunges 2.3%; here is why

Information technology (IT) shares came under intense selling pressure on Monday, September 7. The measure of 10 IT companies on the National Stock Exchange (NSE), NIFTY IT index, dropped as much as 2.3% or 707 points to an intraday low of 29,988 with all the 10 index constituents trading lower.

The wider NIFTY Midsmall IT and Telecom index, which tracks mid- and small-cap IT companies, was also trading with a negative bias. The index fell nearly 1% with 15 out of 20 shares in the index trading lower.

IT shares came under selling pressure on rising expectations that American corporations would cut down on their discretionary spending after stronger than expected August payrolls data from the United States increased chances of a rate hike by the Federal Reserve at its FOMC meeting due later this month, analysts noted.

US clients of Indian IT companies may cut technology budgets owing to a jump in the borrowing cost for them so they may postpone their discretionary spending, reduce consulting spending or renegotiate with IT companies on the contracts, analysts added.

US is the biggest market for the Indian IT companies as they earn significant amount of revenue from there.

US August payrolls data

Total nonfarm payroll employment increased by 1,62,000 in August, and the unemployment rate was unchanged at 4.1%, the US Bureau of Labor Statistics reported on Friday.

Employment increased in food services and bars and in local government education. The information industry lost jobs.

Employment in food services and drinking places increased by 59,000 in August, well above the average monthly gain of 12,000 over the prior 12 months, Bureau of Labor Statistics said.

Local government education added 42,000 jobs in August, largely offsetting a decrease in the prior month.

In August, employment in manufacturing continued its upward trend (+16,000) and is up by 58,000 since a recent low in December 2025. Employment in machinery manufacturing (+6,000) and in fabricated metal product manufacturing (+6,000) continued trending up in August, Bureau of Labor added.

Infosys was top loser in the NIFTY IT index, the stock fell 3.3% to ₹1,093. LTM, Mphasis, Oracle Financial Services Software, Tech Mahindra, Coforge, Wipro, HCL Technologies, Persistent System and Tata Consultancy Services also fell between 1.25% and 2.91%.

Sonata Software was top loser in the NIFTY Midsmall IT and Telecom index. The stock dropped nearly 4% to an intraday low of ₹274. L&T Technology Services, Tata Elxsi, Zensar Technologies, KPIT Tech, Tata Technologies, Hexaware and Sagility shares also fell between 1% and 3%.