Mumbai, June 19 (SocialNews.XYZ) IT stocks came under selling pressure on Friday, with the Nifty IT index plunging more than 6 per cent after global technology services firm Accenture cut its revenue growth guidance and flagged a weaker demand environment, reigniting concerns over the pace of recovery in global technology spending.
The technology index declined as much as 6.43 per cent or 1,831 points to hit an intraday low of 26,634.50 at around 10:25 am, making it the worst-performing sectoral index in early trade.
At the last count, the IT index was trading about 5 per cent or 1,500 points lower at 26,956.90.
The sell-off was led by Infosys, which plunged 7.4 per cent. Tata Consultancy Services (TCS) declined 5.6 per cent, while Mphasis fell 5.3 per cent.
Meanwhile, Persistent Systems dropped nearly 5 per cent, while LTIMindtree slipped more than 4 per cent. Tech Mahindra and HCLTech lost around 4.5 per cent each. Coforge declined nearly 4 per cent, while Wipro shed over 3 per cent.
Selling pressure was also visible across the broader market. On the BSE Midcap index, technology stocks such as KPIT Technologies, Tata Elxsi, Hexaware Technologies and LT Technology Services were among the top losers and traded sharply lower.
The sell-off followed a steep overnight decline in Accenture shares and weakness in the American Depositary Receipts (ADRs) of Indian IT companies after the global consulting and technology services major lowered its FY26 revenue growth guidance.
According to market experts, guidance cuts by the IT firm has triggered sell-off in Indian IT majors’ ADRs.
"Buying can emerge at lower levels in IT since valuations are becoming attractive," the experts said.
They noted that pressure on IT stocks is likely to persist if earnings downgrades continue relative to market expectations in the near term.
Experts further pointed out that despite the sharp correction, valuations of major Indian IT companies remain higher than Accenture's. While Accenture is currently trading at around nine times one-year forward consensus earnings.
Given the prevailing uncertainty, analysts said they remain cautious on the sector.
Accenture shares plunged nearly 18 per cent overnight, while Infosys ADRs tumbled around 10 per cent and Wipro ADRs lost more than 3 per cent.
The company reported third-quarter revenue of $18.7 billion but reduced its annual growth outlook amid continued uncertainty in client spending and revenue headwinds linked to developments in West Asia.
It reported lower new bookings compared to the year-ago period.
The fall in IT stocks comes after the sector had already faced pressure earlier this week following indications from the US Federal Reserve that interest rates could remain elevated for longer, dampening sentiment towards global technology shares.
The Nifty IT index has declined nearly 30 per cent from its peak level of around 38,600, reflecting sustained pressure on the sector amid concerns over global demand, macroeconomic uncertainty and slower technology spending.
However, domestic equity benchmarks declined nearly 1 per cent in morning trade, with Sensex falling over 700 points and Nifty slipping about 200 points below the 24,000 level.
Source: IANS
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