IT stocks came under intense selling pressure in early trade on Wednesday, dragging the broader market lower as plunged sharply following the, while fresh foreign fund outflows and concerns over global uncertainties added to investor sentiment.
Why IT stocks are under pressure
The Nifty IT index fell nearly 3.6 per cent to 28,779.80 from its previous close of 29,883.45. At around 10.14 am, the index was trading 3 per cent lower at 29,050.75, with all counters in the red.
Choice Institutional Equities Research Analyst Kunal Bajaj said IT stocks are facing a near-term sentiment overhang from higher crude prices, hawkish Fed expectations and persistent concerns over AI-led deflation. He added that stronger US jobs data has reinforced expectations of tighter monetary policy, which could keep clients cautious on discretionary tech spending. However, underlying deal activity remains relatively resilient, making the current weakness more sentiment-driven than fundamental.
Coforge led the decline, slumping 8.6 per cent. Infosys, Tech Mahindra, HCL Tech, MphasiS, TCS, Persistent Systems, Wipro, OFSS and LTM shed up to 4 per cent.
Coforge in focus
Coforge’s sharp fall came after the IT services company said before the market opened that chairman and independent director O P Bhatt had resigned with immediate effect.
Bhatt’s exit follows concerns raised by an internal audit over the company’s board evaluation process.
The sharp correction in the IT sector likely reflects concerns over margin pressure and global uncertainties.
Global cues
Global market weakness added to the pressure. Wall Street tumbled overnight after remaining shut on Monday, with the Dow Jones closing lower by more than 600 points. The Nasdaq and S&P 500 also ended lower by 0.3 per cent and 0.6 per cent, respectively.
Domestic benchmarks also fell as Brent crude reached near $100 amid rising geopolitical tensions in West Asia.
The BSE Sensex fell nearly 655 points to a low of 74,923.08 from the previous closing level, while the Nifty 50 declined 168 points to a low of 23,466.65.
(This is a developing story. Stay tuned for more updates.)