Israel-Iran war: Shares of IT companies fell sharply in Thursday’s trading session despite US Federal Reserve kept the key interest rates unchanged and on rising worries of Israel-Iran war.

Despite holding interest rates unchanged for the sixth consecutive meeting, the Federal Reserve reaffirmed expectations for two rate cuts in 2025, as shown in the updated “dot plot,” which outlines forecasts from individual policymakers. However, the Fed lowered its projected rate cuts for 2026 and 2027, indicating a slower pace of monetary easing in the longer term.

After the announcement, Indian IT stocks faced selling pressure. The steep decline in IT stocks dragged the Nifty IT index down by almost 1 per cent during early trading.

IT stocks decline

Cyient share price saw a significant fall of over 4 per cent to ₹1,287 on June 18, meanwhile, shares of Birlasoft and Firstsource Solutions also declined between 2-3 per cent.

Other IT companies like Tech Mahindra, Infosys, LTI Mindtree also saw their shares trade lower around 2%. Tech Mahindra dropped close to 3 per cent, while OFSS, Persistent Systems, Coforge, Mphasis, and Infosys registered losses ranging from 1 per cent to 2.6 per cent.

However, IT giant Wipro and Brightcom Group shares defied the overall market trend and traded higher.

“ The US Fed meeting outcome to keep the interest rates unchanged is on the expected lines, but its guidance for two interest rate cuts in 2025 is good news for Indian IT companies. However, this is insufficient to clear the uncertainty caused by the Israel-Iran war. Therefore, we are witnessing selling pressure in the Indian IT companies,” said Sandeep Pandey, Co-founder of Basav Capital.

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