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Indian Information Technology (IT) stocks were under pressure on Monday, June 2, 2025; How tariffs impact IT stocks – explained
Why are IT stocks falling?
Why Are IT Stocks Falling Today? Indian Information Technology (IT) stocks were under pressure on Monday, June 2, 2025, after the US government signaled that reciprocal tariffs would remain in place.
The Nifty IT index slipped as much as 1.4%, touching a low of 36,770.15. Among major IT stocks, Mphasis tumbled 6.7%, while Persistent Systems and HCL Technologies fell 1.8% each. Tech Mahindra was down 1.7%, Infosys 1.5%, and Wipro 1.4%.
Why Are IT Stocks Falling?
The sell-off in IT shares followed comments by US Commerce Secretary Howard Lutnick, who said on Sunday that reciprocal tariffs would not be removed. Lutnick acknowledged ongoing legal challenges but noted the administration would find other ways to enforce the tariffs if necessary.
Separately, National Economic Council Director Kevin Hassett expressed confidence that the Supreme Court would uphold Trump’s tariff policies. Last week, the US Court of International Trade overturned much of the steep levies, only for a federal appeals court to reinstate them the following day.
Additionally, US President Trump announced on Friday that steel import tariffs would double from 25% to 50% starting June 4, reinforcing the administration’s hardline trade stance.
How Tariffs Impact IT Stocks
US tariffs are seen as a negative for Indian IT companies because they can stoke inflation and lead the US Federal Reserve to keep interest rates elevated for longer. Such conditions risk slowing the US economy, which is a key market for India’s outsourcing and technology services industry.
The 10-year US Treasury yield climbed 24 basis points to 4.4% in May, raising concerns that the bond market is pricing in a ballooning US fiscal deficit and growing policy uncertainty — factors that could dampen US demand for Indian IT services.
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Aparna Deb is a Subeditor and writes for the business vertical of News18.com. She has a nose for news that matters. She is inquisitive and curious about things. Among other things, financial markets, economy, a…Read More
Aparna Deb is a Subeditor and writes for the business vertical of News18.com. She has a nose for news that matters. She is inquisitive and curious about things. Among other things, financial markets, economy, a… Read More
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