IT Stocks Fall Up to 5% Today; What Is Driving the Selloff?
Indian IT stocks came under heavy selling pressure on Wednesday, October 28, 2026, with the Nifty IT index falling around 3.9 percent from the previous close. Major stocks from the sector were among the losers as investors turned cautious ahead of the US Federal Reserve’s policy decision and continued concerns over growth in the IT services sector also added to the pressure.
Stock in Focus
Infosys Ltd shares fell around 5 percent during the session, leading the decline among major IT stocks. Tata Consultancy Services Ltd declined 3.7 percent, while HCL Technologies Ltd dropped 3.64 percent. Tech Mahindra shares fell 4 percent, and Wipro declined 2.5 percent. The selling pressure across these companies indicates that concerns are affecting the broader IT sector rather than just one stock.
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Reasons Why IT Stocks Are Falling Today
Concerns Over Artificial Intelligence Disruption : Anthropic reported $16.3 billion in revenue in the first half of 2026, while its net loss reached $80.7 billion over the same period, highlighting the costs of scaling its AI business.
For Indian IT companies, the concern is that clients are directing more technology budgets towards AI infrastructure, software and data modernisation, putting pricing pressure on traditional IT services and raising questions about future revenue growth.
US Federal Reserve Policy Decision:
According to the CME FedWatch Tool, markets are pricing in a 90.6 percent probability of the US Federal Reserve keeping interest rates unchanged at its October 28 meeting, while the probability of a 25 basis point rate hike stands at 9.4 percent. Investors are monitoring the decision for clues on future interest rates, which could influence global technology spending and demand for Indian IT services.
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US Tech Rally Contrasts With Indian IT Selloff: The Nasdaq Composite rose 2 percent in the last 2 days, while US semiconductor stocks continued to gain, supported by optimism around AI development and infrastructure. In contrast, Indian IT stocks declined amid concerns over traditional IT services growth. This divergence may reflect the difference between strong investor interest in AI-focused chipmakers and uncertainty over how AI could disrupt the outsourcing and software services business models of Indian IT companies.
IT Major Cuts FY27 Revenue Guidance : Infosys lowered its FY27 revenue growth guidance to 1 to 2 percent in constant currency terms, compared with 1.5 to 3 percent earlier. The revision has raised concerns about client spending and demand for IT services. Investors are also assessing whether other IT companies could face similar growth challenges in the coming quarters.
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Profit Booking After the Recent Rally: Profit booking may also be contributing to the decline in IT stocks. After the sector’s recent rally, some investors may be selling shares to lock in gains. The emergence of fresh concerns over revenue growth, AI disruption, and global demand could have encouraged investors to reduce positions, adding to the selling pressure across the sector.
Rupee Weakness Adds to Market Concerns : The Indian rupee has rallied 0.93 percent over the last five days, reaching around Rs 95.2 per US dollar. A stronger rupee can weigh on IT exporters by reducing the rupee value of their dollar earnings. This could put pressure on reported revenue growth and operating margins, even if dollar-denominated business remains stable.
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Conclusion
The fall in IT stocks reflects a combination of weaker growth expectations, AI-related concerns, and uncertainty over US interest rates. Infosys’ reduced FY27 revenue guidance has added to concerns about the sector’s recovery, while profit booking may have intensified the decline after the recent rally. Investors will now watch global demand, deal wins, and management commentary for signs of improvement.