On April 2, 2025 Indian IT stocks like Tech Mahindra, Infosys, and Wipro saw increases of up to 2%. This rise happened as investors kept an eye on the upcoming U.S. reciprocal tariffs set to begin this month.
Market Performance Overview
The wider Indian stock market showed this upward trend. The NSE Nifty 50 went up by 0.55% to 23,033.75, while the BSE Sensex also climbed 0.55% reaching 75,865.57 in morning trading. IT stocks led the pack, with companies such as HCL Technologies, Tata Consultancy Services (TCS), Wipro, and Infosys each gaining about 2%.
Invest in Indian Markets and Unlock Future Potential With 5paisa!Why Are IT Stocks Going Up?
A few things are driving this increase:
- U.S. Federal Reserve’s Monetary Policy: The Fed still plans two interest rate cuts this year. Lower U.S. interest rates often weaken the dollar and lower Treasury yields making emerging markets like India more attractive to foreign investors.
- U.S. Trade Retaliation Looms: The markets reacted well, but experts remain wary about how these tariffs might affect Indian IT companies. The new trade rules seek to address trade imbalances and could impact software exports and outsourcing work.
What Market Experts Say
Upbeat About Fed Decisions: The Federal Reserve’s plan to cut rates has lifted investor spirits. Lower U.S. rates might push more money into growing markets like India helping areas such as IT.
Worry Over Trade Rules: Even with today’s gains, the coming U.S. tariffs create risk. If they start, they could hurt income for Indian IT companies in software sales and outsourcing.
A Look Back: How Trade Rules Have Affected IT Stocks
Indian IT sector stocks have often reacted a lot to trade rules. For example, in February 2025, TCS and Infosys saw drops of up to 3.5% after the U.S. government said it would match tariffs.
India’s taking action to address trade issues with the U.S. by making some big changes. One of the key steps involves scrapping the 6% “Google tax” on internet advertising. This tax put in place in 2016, was aimed at overseas tech firms doing business in India without a physical office there. By getting rid of it, India might be hoping to influence U.S. choices on tariffs.
What’s Next for Investors?
- Short-Term Volatility: Today’s gains signal positivity, but uncertainty lingers. IT stocks might fluctuate as the situation unfolds.
- Long-Term Outlook: Indian IT’s future depends on trade dispute outcomes and global economic trends. Companies with diverse clients and flexible strategies could better handle these challenges.
As U.S. tariffs loom Indian IT companies aim to balance their optimism about monetary policy with caution about possible trade barriers. The coming weeks will prove crucial to determine the sector’s ability to adapt to these global economic shifts.
