The Nifty IT index fell for a third straight session on Tuesday, with heavyweight stocks such as Infosys, TCS, Wipro and HCLTech featuring among top Nifty losers. Information technology shares were under heavy selling pressure as investors worried that US interest rates could stay elevated for longer, potentially delaying corporate technology spending in the industry's largest overseas market.

At 11:06 am, the Nifty IT index was down 1.95 percent, making it the biggest sectoral loser on the NSE, compared with a 0.27 percent decline in the benchmark Nifty 50. The index has now lost around 4 percent over the past three trading sessions.

Selling was broad-based across frontline IT stocks. Wipro fell 2.9 percent, Infosys declined 2.5 percent, Tata Consultancy Services dropped 2.2 percent and HCLTech slipped 2.1 percent, with all four featuring among the top losers on the Nifty 50.

  • Share Markets Live Updates | Sensex, Nifty, GIFT Nifty Today

According to Reuters, today's weakness was driven by renewed concerns that US interest rates may remain higher for longer, raising the risk that enterprises could postpone discretionary technology spending. Since North America contributes the bulk of revenues for India's IT services industry, any slowdown in corporate spending in the region tends to weigh heavily on investor sentiment towards the sector.

The latest bout of selling also reflects lingering concerns over the outlook for global IT spending after Accenture's weaker-than-expected revenue guidance last week. The consulting giant's outlook reinforced fears that discretionary spending remains soft, clients continue to delay large project decisions, and artificial intelligence is beginning to reduce demand for some traditional outsourcing work more quickly than previously anticipated.

Market participants also appear to be drawing a sharper distinction within the global technology sector. Rather than turning negative on artificial intelligence as a theme, investors are increasingly favouring companies positioned to benefit directly from AI adoption -- including semiconductor manufacturers, memory-chip suppliers, networking companies and data-centre infrastructure providers. On the other hand, they remain more cautious of traditional IT services firms that rely on application development, maintenance and consulting contracts.

The weakness in Indian IT stocks came despite a strong overnight performance by global technology shares. Wall Street ended higher on Monday as investors returned to AI-linked stocks following recent volatility, lifting the US information technology index 1.7 percent. Asian equities also advanced on Tuesday, extending the regional benchmark's strongest quarterly gain in nearly two decades, buoyed by optimism surrounding the AI trade.

Disclaimer: The views and investment tips expressed by experts on Moneycontrol are their own and not those of the website or its management. Moneycontrol advises users to check with certified experts before taking any investment decisions.