At around 1.32 pm, Nifty IT was trading at 25,879.25 down by 227.45 points or 0.9%. The index has touched an intraday high and low of 26,105.20 and 25,728.45 respectively.
Mphasis was the top underperformer tumbling 3.7% followed by Oracle Financial Services diving 1.6%.
Heavyweights Tech Mahindra, Wipro and Mindtree slipped between 1.1-1.4%. TCS shed nearly 1%. HCL Tech and Infosys fell by 0.6% and 0.4% respectively.
On the positive front, L&T Infotech took lead surging by 1.4% followed by a marginal gain in Coforge.
At Wall Street, overnight, investors remained cautious over rising prices and their effect on inflation going forward. Amid the resurgence in the Covid-19 pandemic, inflation risks have emerged higher.
However, a rebound in technology stocks during the second half of Tuesday's session calmed the blow on US indices. The tech-heavy Nasdaq Composite index finished at 13,389.43 slightly lower.
The government will present CPI Inflation data for April 2021, while IIP data for March 2021 later today.
The Consumer Price Index (CPI) or retail inflation spiked to 5.52% in March 2021 compared to 5.03% of the previous month. The Quick Estimates of Index of Industrial Production (IIP) stood at 129.4 in February 2021, shrinking by 3.6% due to lower production in the mining and manufacturing sectors.