Infosys, TCS, HCL Tech, Coforge, Tech Mahindra, Wipro: Four factors denting sentiment in IT stocks

IT stocks crash:  Shares of IT sector firms such as Infosys, TCS, HCL Technologies, Coforge, Tech Mahindra and Wipro dragged the benchmark indices lower today. The fall in IT stocks comes in line with a crash in the US market overnight. Dow Jones ended 628 pts lower at 52,807 after strong jobs data renewed concerns about higher interest rates. The August employment report showed the US economy added 162,000 jobs—nearly triple what economists expected.

According to the CME FedWatch tool, the probability of a rate hike now stands at 58 per cent, up from 47 per cent last month.

The United States remains the largest market for Indian IT and software service exports, accounting for roughly nearly 53% of India's total software exports in fiscal year 2025.

Elevated interest rates often lead to raised borrowing and financing costs for large US corporations, putting greater pressure on capital allocation. In an effort to preserve cash flows and control expenses, many companies have scaled back discretionary technology spending. This has resulted in delays to software migrations, deferred technology upgrades and a slowdown in the rollout of large-scale digital transformation projects.

Another factor that led to a negative sentiment in the IT stocks is US suspending Cognizant’s permanent labour certification filings. This revived concerns over the impact of the Trump administration’s campaign against alleged visa fraud.

Meanwhile, Infosys (4.30%), TCS (4%), HCL Technologies (4%) and Tech Mahindra (3.21%) were the top Sensex losers in Wednesday's trade.  Wipro shares too fell 3% to Rs 166.35 in the afternoon session today.

BSE IT index sinked 961 pts or 3% to hit the day's low of 27,762. Nifty IT index too lost over 3% or 1104 pts to 28,779.

Third factor, which dented sentiment in the IT sector stocks was that the expanded 9-11 Response and Biometric Entry-Exit Fee Final Rule came into effect from today, September 9, 2026, requiring covered employers to pay the fee for routine H-1B and L-1 visa extensions even when keeping the same employee with the same company.

Employers of Indian professionals on H-1B and L-1 visas will face higher costs from today to retain their workers in the United States. Under the expanded provision, employers will need to pay $4,000 for each H-1B extension petition and $4,500 for each L-1 extension petition.

Sentiment in the sector also took a hit after IT major Coforge saw its shares plunging 7 per cent after Chairman OP Bhatt resigned following an internal audit review. Bhatt said continuing on the board while there remains a disagreement considering the characteristics of his "good faith actions in the board evaluation process" would not be conducive to the effective functioning.

Nitant Darekar, Research Analyst at Bonanza Portfolio said, "Today's IT selloff wasn't about any one name; it was the sector carrying the market's worries for it. Crude above 97 dollars and revived Fed rate hike bets set the tone, but the real sting was the expanded 9-11 visa fee that kicked in today. Paying 4,000 dollars on every H-1B extension and 4,500 on every L-1 turns an occasional charge into a running annual bill for firms built on onshore Indian engineers, and the Street is reading that straight into margins in a sector already down roughly 24% this year."

Hitesh Tailor, Technical Research Analyst at Choice Broking said, "Among the major IT stocks, Wipro, Infosys and TCS have witnessed notable profit booking and selling pressure in recent weeks. The latest fall in IT stocks was marked by gap-down openings followed by further selling pressure throughout the session. Most of the major IT stocks are currently facing rejections from their key EMAs and maintaining a lower-high and lower-low formation, indicating continued weakness in the near-term trend.

On the downside, the index has immediate support around 28,700, while the 28,000–28,150 zone remains a crucial support area, aligned with the recent swing low from where the previous recovery began. Sustaining above this zone could help CNXIT stabilise and continue its consolidation. On the higher side, CNXIT is currently facing resistance from its key short- and medium-term EMAs, while the 31,500–32,000 zone remains the major hurdle. A decisive breakout and sustained move above this resistance area would indicate renewed upside momentum. Until then, sideways consolidation with intermittent volatility is likely."