The IT sector plays a crucial role in global economic growth, driving innovation through software, services, and technological solutions. It includes major industries like software development, IT services, and consulting. As digital transformation accelerates, the sector continues to experience strong demand across various industries.
Trump’s Tariff
The trade tensions between the United States and China, where President Donald Trump had previously imposed tariffs on Chinese imports, affected global trade, including the technology sector. These tariffs raised concerns among businesses and investors about the potential impact on the cost of goods and services, especially for companies like Indian IT firms that export services globally.
However, Trump’s indication of easing these tariffs or adopting a more flexible approach brought relief to the market. This lessened the impact on Indian IT companies, which earn a significant portion of their revenue in U.S. dollars, particularly in the technology sector. The reduced concerns about higher costs and trade disruptions ultimately benefited IT stocks, including those in India
Market Impact
India’s IT sector rose nearly 1.5 percent, driven by global market relief following U.S. President Trump’s flexible stance on tariffs, easing concerns of a trade war.
In Tuesday’s trading session, the Nifty IT index saw a notable rise, currently trading at Rs. 37,771, reflecting an increase of 1.5 percent compared to the previous day’s close of Rs. 37,217.05.
Brokerage View
Dr. VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services said: ‘IT has been underperforming due to fears that a U.S. growth slowdown could impact the Indian IT industry. The risk-reward in IT stocks is now favorable for buyers. Trump’s latest message that he will be ‘flexible’ on tariffs and ‘give breaks to many countries’ has raised hopes for some softer treatment for India. But we will have to wait until April 2’
The List of Key Companies Involved
Stocks of major Indian IT companies, which generate a substantial part of their revenue in U.S. dollars, saw an increase on the day.
- L&T Technology Services Ltd surged by up to 3.3 percent in today’s trade compared to yesterday’s closing price of Rs. 4,578.90
- HCL Technologies Ltd surged by up to 3.4 percent in today’s trade compared to yesterday’s closing price of Rs. 1,604.15.
- Tata Consultancy Services Ltd surged by up to 2.25 percent in today’s trade compared to yesterday’s closing price of Rs. 3,628.95.
- Coforge Ltd surged by up to 4 percent in today’s trade compared to yesterday’s closing price of Rs. 7,769.55.
- Mphasis Ltd surged by up to 3 percent in today’s trade compared to yesterday’s closing price of Rs. 2,482.95.
Other stocks, such as Wipro Ltd, Infosys Ltd, Tech Mahindra, LTI Mindtree Ltd, Persistent Systems Ltd, and others, also saw gains in the day’s trade.
Written by Sridhar J
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