Global giant Accenture’s warning on slower growth sent India’s IT stocks tumbling on Friday, wiping out billions of rupees in market value and dragging the Nifty IT index down more than 5%.
As of 10:57 am, the Nifty IT index was down 5.51%, making it the worst-performing sectoral index of the day. Infosys was the biggest casualty, falling 7.85% to Rs 1,039. TCS declined 5.93% to Rs 2,072.7, Tech Mahindra slipped 4.83%, HCLTech fell 3.94%, and Wipro was down 3.28%.
The sharp decline also . TCS hovered near a six-year low, while Wipro traded close to levels last seen more than five years ago.
The obvious question is: if all IT companies were hit by the same trigger, why did Infosys fall the most?
The selloff began after Accenture, one of the world’s largest IT services companies, lowered the upper end of its annual revenue growth forecast.
Investors closely track Accenture because it serves many of the same global clients as Indian IT firms. When Accenture signals that companies are cutting back or delaying technology spending, markets often assume Indian IT companies could face similar challenges.
In simple terms, Accenture’s message was that the recovery in technology spending remains slower than many investors had hoped.
The answer also lies in where Infosys stood before Accenture’s warning.
For several quarters, investors have been worried about slowing growth across the IT sector. While Infosys has continued to announce large deal wins, clients have remained cautious about spending on discretionary projects—technology initiatives that companies can postpone during uncertain times.
That has led to concerns that revenue growth may remain subdued despite healthy order books.
When Accenture highlighted continued weakness in client spending, investors saw it as confirmation of those concerns.
Another factor was the sharp decline in Infosys’ American Depositary Receipts (ADRs) overnight.
ADRs are instruments traded on US stock exchanges that represent shares of foreign companies. They often provide an early indication of how investors are reacting to major developments.
Following Accenture’s announcement, Infosys ADRs came under heavy selling pressure in the US. By the time Indian markets opened on Friday, domestic investors had already seen that reaction, adding to the pressure on the stock.
The market reaction suggests investors believe Infosys could be more vulnerable to a prolonged slowdown in discretionary technology spending.
Since the company derives a significant share of its business from large global clients that can delay technology budgets during periods of uncertainty, Accenture’s cautious outlook reinforced fears that growth could remain under pressure for longer than expected.
That explains why Infosys fell more sharply than peers such as HCLTech and Wipro, and even underperformed TCS during the selloff.
Markets are driven not only by fundamentals but also by investor psychology.
As Infosys approached a five-year low, more traders and short-term investors rushed to exit their positions. Such levels often trigger additional selling because investors fear further declines if key support levels are breached.
This created a snowball effect, amplifying the stock’s losses.
Is the concern only about Infosys?
Not at all.
Friday’s selloff reflects broader concerns about the outlook for global technology spending.
Apart from Infosys, several IT stocks came under pressure. LTIMindtree fell 5.37%, Mphasis dropped 5.49%, Persistent Systems declined 4.76%, Coforge lost 3.62%, and the Nifty IT index plunged more than 5%.
The message from the market is clear: investors remain unconvinced that the slowdown in global technology spending is over.
The next major trigger for the sector will be quarterly earnings and management commentary.
Investors will be looking for signs that clients are increasing technology budgets, discretionary spending is recovering, and large deal wins are translating into actual revenue growth.
For now, Accenture’s warning has reminded investors that the recovery in global IT spending remains uncertain. And among India’s technology giants, Infosys appears to be carrying the heaviest burden of that uncertainty.
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