Source : INDIA TODAY NEWS
Infosys, TCS, HCLTech and other IT stocks came under heavy selling pressure on Friday after global IT services giant Accenture cut the upper end of its annual revenue growth forecast, triggering concerns about demand in key overseas markets.
As of 9:38 am, Infosys was down 8.05% at Rs 1,036.7, making it the worst-performing Nifty stock. TCS fell 5.94% to Rs 2,072.4, HCLTech declined 5.07% to Rs 1,102.9, while Tech Mahindra and Wipro dropped 5.37% and 3.42%, respectively.
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The selloff dragged the benchmark Nifty 50 down 0.85% to 23,962.8, while Sensex also fell over 700 points.
WHY IT STOCKS CRASHED TODAY?
The sharp decline followed a selloff in the American Depositary Receipts (ADRs) of Indian IT companies overnight after Accenture’s guidance disappointed investors.
Market experts said the correction reflects concerns over a slowdown in discretionary technology spending by global clients, particularly in the US, which remains the biggest revenue market for Indian IT services firms.
“Guidance cuts by Accenture have triggered sell-off in Indian IT majors’ ADRs. This can cause correction in IT stocks in the domestic market too. Buying can emerge at lower levels in IT since valuations are becoming attractive,” said VK Vijayakumar, Chief Investment Strategist at Geojit Investments.
The pressure on IT stocks also comes amid uncertainty around the pace of technology spending recovery. While companies have reported healthy deal wins, conversion of those deals into revenue has remained slower than expected as clients continue to scrutinise budgets and delay discretionary projects.
The sector is also facing investor concerns around the impact of artificial intelligence on traditional outsourcing models. Although Indian IT firms have positioned themselves as beneficiaries of AI adoption, markets remain cautious about how quickly new AI-led opportunities can offset weakness in legacy businesses.
Despite Friday’s sharp correction, analysts believe the selloff could attract value buying if earnings expectations stabilise. Many frontline IT stocks are now trading significantly below their 52-week highs, with Infosys hitting a fresh one-year low during the session.
For investors, the focus will now shift to upcoming quarterly earnings, management commentary and signs of recovery in technology spending in the US and Europe. Whether Friday’s rout marks a temporary reaction to Accenture’s guidance cut or signals a deeper slowdown in global IT demand remains the key question for the sector.
– Ends
SOURCE :- TIMES OF INDIA
