Hi @HariPrasadSridhar & @johanbjoerk, welcome to the community. I am sorry to hear you are experiencing this issue 
Try these methods one after the other. Verify whether the problem was solved after each method, before trying the next one.
- Make sure you have removed the temporary transparent protection film that covers the screen when you first buy your Xperia™ device. You recognise this temporary protection film by its protruding tab. If you don’t remove the temporary film, the touchscreen might not respond correctly. You should replace the temporary protection film with a screen protection film that is specifically intended for your Xperia™ model. Note! Make sure not to remove the ASF (anti-shatter film), if your device has one.
- Check the touchscreen performance by using Diagnostics or the Service menu.
- Wipe the screen with a clean and dry cloth to make sure that your display is clean. Make sure that your hands and fingers are clean and dry before using the touchscreen.
- If you have applied a screen protection film, make sure it's specifically intended for your Xperia™ model. Make sure that the screen protection film is properly fitted and that there are no air bubbles, dust or moisture under the film.
- Remove any protective case, screen protection film or cover to verify it's not interfering with the touchscreen.
- Restart/Force restart your device.
- Disable Magnification gestures in the Accessibility settings menu. If Magnification gesture is enabled by mistake, the touch may be slowed down as designed.
- For devices with Glove mode: If you perceive the touchscreen as too sensitive, check if Glove Mode is on. If it's on, turn it off.
- If you're using the touchscreen while charging, make sure that you are using an original Sony charger and USB cable specifically intended for charging your device. Other chargers may have a negative impact on the touch functionality of the screen.
- If there is a memory card in your device, remove it and restart the device. If removing the memory card solves the issue, your SD card may be damaged. In this case you need to get a replacement SD card for your Xperia™ device.
- Use Safe mode to check if any downloaded applications are causing the problem. If the device’s performance improves in Safe mode, it’s likely that one or more of your post-purchase downloaded applications are affecting the device negatively. You can exit Safe mode and restart the device to uninstall the application or applications that you suspect are causing the problem. If the problem is recent and you're not sure which application is causing the problem, you can start by uninstalling the most recently downloaded application.
- Update your Xperia™ device to a new software version using Xperia™ Companion or the Software update feature in the Settings menu (wireless update).
- Perform a factory data reset or perform a software repair using Xperia™ Companion. Note! If possible, back up all personal data before performing a software repair. All data in the internal memory is overwritten during a software repair. Content on an external SD card is kept.
- Contact your retailer or a Sony Mobile repair partner. Note! Before handing the phone over for service, if possible, back up all your data to avoid possible data loss. Data on the device gets deleted when examined. Don't forget to bring proper documentation, for example, proof of purchase and warranty card. The documentation required may vary depending on market, country or region. If possible, deactivate Protection by my Xperia and remove the Google™ accounts on your device before sending it in for service or repair to prevent Protection by my Xperia or Google™ Device Protection from locking your device.
- Find and tap Settings > Accessibility > Magnification.
- Tap the option you want to disable, then tap the on-off switch.
- From your Home screen, tap the Application screen icon.
- Find and tap Settings > Accessibility > Magnification gestures.
- Drag the slider beside On to the left.
- From your Home screen, tap the Applications screen icon.
- Find and tap Settings > Display > Glove mode.
- Drag the slider beside On to the left.
- From your Home screen, tap the Applications screen icon.
- Find and tap Settings > Display > Glove mode.
- Drag the slider beside Glove mode to the left.
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