Nifty IT extends falls for 4th straight month in April, posts longest losing streak in nearly a decade

IT stocks in focus: Although the Nifty IT index rebounded sharply during the second half of April, it ended the month in negative territory, extending its losing streak to a fourth consecutive month—the longest such streak since 2016—losing 3% of value. 

Seven out of the 10 constituents of the index closed lower in April, with Coforge emerging as the top laggard, falling by 10%. It was followed by Wipro, Infosys, TCS, Persistent Systems, HCL Technologies, and MphasiS, all ending the month with losses ranging between 1.3% and 8%.

Despite gaining 10% during the last three weeks of April, the index remains in bear market territory, still down 22.33% from its record high of 46,088 points.

Tech giants flag tariff-linked risks

The easing of global trade tensions and better-than-feared March quarter results (Q4FY25) from domestic IT giants came as a relief. However, companies remained cautious about the FY26 outlook amid potential growth challenges in developed economies.

Firms like Infosys and Wipro have warned of a sluggish year ahead, citing increased exposure to tariff-related pressures in sectors such as retail and manufacturing. Industry leader TCS missed fourth-quarter earnings estimates and warned about clients delaying decision-making in discretionary projects.

While the U.S. has intensified trade talks with its closest trading partners, analysts believe that ongoing tariff disputes will continue to weigh on the global economy—particularly on the already-strained U.S. economy. Recent data suggests that the impact is already unfolding, as the world’s largest economy contracted in the first quarter of CY25.

According to the Commerce Department’s Bureau of Economic Analysis, gross domestic product shrank at an annualized rate of 0.3%, dragged down by a surge in imports as businesses rushed to stock up before new tariffs took effect.

Experts say the U.S. economy was showing signs of weakness even before the latest wave of tariffs, heightening the risk of a 2025 recession and fueling expectations that the Federal Reserve could cut interest rates up to four times this year.

Indian IT’s fortunes tied to US-China tariff dynamics

President Trump had announced a slew of reciprocal tariffs on all trading partners on April 2, which were later paused on April 9, except in the case of China. Trade negotiations between the U.S. and China remain strained.

While the Trump administration expects to finalize initial tariff agreements with some trading partners within weeks, talks with India are reportedly not “close to the finish line,” and no official negotiations with China are currently underway, U.S. Trade Representative Jamieson Greer told Fox News Channel.

The Indian IT companies derive major portions of their revenue from the American market, and any easing of trade tensions between US and China is expected to boost the share prices in the near future. 

Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before taking any investment decisions.