Sector under pressure amid cautious sentiment and expectations of a "hawkish cut"; Persistent Systems, Coforge among top losers.

Shares of Indian IT companies declined for the third consecutive session on December 10, dragged down by investor caution ahead of the U.S. Federal Reserve's policy decision later today.

The Nifty IT index fell nearly 1 percent to 37,808 by 2:30 pm, reflecting broad-based selling in the sector.

The Federal Open Market Committee (FOMC) meeting, which began on December 9, is widely expected to result in a 25-basis-point rate cut. However, analysts anticipate a “hawkish cut”—where the policy statement, updated economic projections, and Chair Jerome Powell’s commentary could signal a higher threshold for future rate reductions. This outlook has kept IT investors on edge, given the sector’s heavy reliance on U.S. revenue.

Analysts Weigh In:
Ajit Mishra, SVP of Research at Religare Broking, noted, “Sentiment weakened primarily due to rising caution ahead of the upcoming Fed meeting, with investors worried about the possibility of a tighter global monetary stance and its spillover impact on emerging markets.”

Siddharth Maurya, Founder & Managing Director of Vibhavangal Anukulakara, highlighted structural challenges: “The Indian IT industry has suffered a blow lately after international customers reduced spending on non-essential activities. Deal pipelines have slimmed, and foreign investors remain apprehensive about macro risks.”
He added, “Automation and AI are reshaping the sector, but uncertainty will linger until clients confirm new outsourcing deals. However, much of the negative scenario is already priced in, and dividend yields are appealing. This could present a value opportunity for long-term, contrarian investors willing to ride out volatility over the next 12–18 months.”

Top Losers:

• Persistent Systems: down over 4%
• Coforge: fell nearly 3%
• Mphasis, Infosys, TCS, Tech Mahindra: declined nearly 1% each
• LTIMindtree: traded in the red with marginal losses

Notable Exceptions:
Wipro and HCLTech bucked the trend to trade in positive territory.

The sector’s performance will remain sensitive to the Fed’s guidance and its implications for global liquidity, client spending, and currency movements.