Indian IT sector stocks experienced a sharp downturn on September 9, 2026, with major players like Infosys, TCS, HCL Technologies, and Wipro leading the decline. The sell-off was attributed to a confluence of four significant factors impacting investor sentiment, ranging from tightening monetary policy expectations in the United States to increased operational costs for Indian firms.
US Rate Hike Concerns Weigh Heavily
A primary driver for the negative sentiment stemmed from overnight losses in the US market, where the Dow Jones fell by 628 points. Stronger-than-expected US August employment data, showing 162,000 jobs added—nearly triple economists' forecasts—renewed fears of higher interest rates. The probability of a US rate hike climbed to 58% from 47% last month, according to the CME FedWatch tool.
With the United States accounting for approximately 53% of India's total software exports in fiscal year 2025, elevated interest rates directly impact Indian IT firms. Higher borrowing costs for large US corporations often lead to reduced discretionary technology spending, resulting in delays for software migrations, deferred upgrades, and slower rollouts of digital transformation projects.
Visa Scrutiny and Increased Costs
Adding to the pressure, the US government suspended Cognizant’s permanent labor certification filings, reigniting concerns about the impact of the Trump administration's ongoing campaign against alleged visa fraud. This move signals potential hurdles for Indian IT companies operating in the US.
Further exacerbating operational costs, the expanded 9-11 Response and Biometric Entry-Exit Fee Final Rule came into effect today, September 9, 2026. This rule mandates employers to pay substantial fees for routine H-1B and L-1 visa extensions, even for existing employees. Specifically, employers now face a $4,000 fee for each H-1B extension and $4,500 for each L-1 extension.
"Today's IT selloff wasn't about any one name; it was the sector carrying the market's worries for it," commented Nitant Darekar, Research Analyst at Bonanza Portfolio. "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."
Corporate Leadership Change at Coforge
The sentiment in the IT sector also took a hit following the resignation of Coforge Chairman OP Bhatt. Shares of the IT major plunged 7% after Bhatt stepped down due to a disagreement arising from an internal audit review concerning his "good faith actions in the board evaluation process."
Market Reaction and Outlook
The combined impact of these factors led to widespread losses across the Indian IT sector. The BSE IT index plummeted by 961 points, or 3%, reaching a day's low of 27,762. Similarly, the Nifty IT index shed over 3%, or 1104 points, to 28,779. Infosys, TCS, HCL Technologies, and Tech Mahindra were among the top Sensex losers, with Wipro also experiencing a 3% dip.
Hitesh Tailor, Technical Research Analyst at Choice Broking, noted significant profit booking and selling pressure in major IT stocks. He observed "gap-down openings followed by further selling pressure throughout the session," with most stocks "maintaining a lower-high and lower-low formation, indicating continued weakness in the near-term trend."
Analysts suggest immediate support for the Nifty IT index around 28,700, with a crucial zone between 28,000 and 28,150. Resistance is anticipated from short- and medium-term Exponential Moving Averages, with a major hurdle at the 31,500–32,000 zone. Until a decisive breakout occurs, sideways consolidation with intermittent volatility is expected.