Nifty IT Index Slumps 4% as Infosys Downgrades and Profit Booking Trigger Sectoral Selloff
Indian information technology stocks witnessed sharp selling pressure on Wednesday, October 28, 2026, dragging the sectoral Nifty IT index down 4% to an intraday low of 30,928.10 on the National Stock Exchange (NSE). The decline made the IT pack the worst performer among sectoral gauges, weighed down by steep declines in major IT companies such as Infosys, Tata Consultancy Services (TCS), and Coforge.
By mid-morning, the Nifty IT index was trading 3.4% lower at 31,110.45, compared to a 0.62% decline in the benchmark Nifty 50 index.
Key Stock Movements in the IT Basket
The selling was broad-based across both tier-1 and mid-cap software exporters:
- Infosys, Coforge, and Mphasis emerged as the steepest losers, sliding between 4% and 6% in intraday trading.
- Heavyweight Tata Consultancy Services fell over 3%, alongside Tech Mahindra, HCL Technologies, Persistent Systems, and LTIMindtree, which dropped between 3% and 4%.
- Smaller names in the index, including Birlasoft, Newgen Software Technologies, and KPIT Technologies, also traded deep in the red, falling over 2% to 3%.
Why IT Stocks Are Under Pressure
Infosys Guidance Cut and Brokerage Downgrades The primary catalyst behind the sudden weakness was a wave of rating downgrades for Infosys. As many as four institutional brokerages downgraded the software services bellwether in a single day after the company trimmed its annual constant-currency revenue guidance, citing persistent client caution, delayed decision-making cycles, and near-term pricing pressures.
Profit Booking After Strong Outperformance The decline is also being driven by routine profit booking following a sharp rally earlier in the month. Prior to Wednesday’s drop, the Nifty IT index had outperformed the broader market substantially in October 2026, gaining approximately 12% up to Tuesday, even as the Nifty 50 slipped 0.05% over the same period. Having run up sharply ahead of earnings announcements, market participants took the guidance revisions as a trigger to lock in short-term gains.
Structural Concerns Over Generative AI and Pricing Beyond immediate earnings numbers, institutional investors continue to price in long-term structural shifts. Analysts have voiced concerns over pricing compression and deflationary pressures on legacy services as generative artificial intelligence tools automate traditional software engineering workloads. With hyperscalers and global enterprises keeping a tight leash on discretionary digital spending, margin expansion for Indian IT majors faces near-term headwinds.
