TCS, Infosys, Tech Mahindra Fall Up To 3%: Why Are IT Stocks Falling Today? – News18
Last Updated:
Information technology stocks took a hit on December 31, with major players like TCS, Infosys, and Tech Mahindra falling by 2-3%
IT Stocks Fall
IT Stocks Drop Up to 3%: Information technology stocks took a hit on December 31, with major players like Tata Consultancy Services (TCS), Infosys, and Tech Mahindra falling by 2-3%. The decline comes as US treasury yields remain elevated above 4.5%, putting pressure on growth-sensitive sectors like technology.
Wall Street’s tech-heavy Nasdaq Composite index dropped over 1% overnight, sending negative signals to domestic IT stocks. Growth expectations for IT majors in Q3 also remain subdued, largely due to weak seasonal factors, which further dampened investor sentiment.
As a result, most IT stocks experienced significant losses during the session. While all six large-cap IT companies saw declines of 1-3%, mid-cap stocks such as Coforge, L&T Technology, Mphasis, and Persistent Systems lost 1-4%. These sharp losses across the Nifty IT index caused it to fall by more than 2%, making it the worst-performing sector of the day.
Despite a near 4% drop today, Persistent Systems has gained over 12% this month, outperforming the Nifty IT index, which has risen nearly 2%. The stock last traded at Rs 6,380.75 per share on the NSE.
Other notable losers included Coforge, TCS, Wipro, and Infosys, all down by up to 2%. Meanwhile, stocks like LTIMindtree, HCL Technologies, and L&T Technology Services saw a decline of 0.6-1%.
The Nifty IT index, despite facing global challenges, has delivered a strong 21.5% return over the past year, in contrast to the Nifty50, which is set to end the year with a return of around 9%.
G. Chokkalingam, Founder of Equinomics, explained, “Year-end profit booking by FIIs in the IT sector, which performed well this year, coupled with concerns about the US Federal Reserve not significantly reducing interest rates in the near term, led to this correction.” He added that the elevated US interest rates might impact IT services orders to Indian companies.
Atul Parakh, CEO of Bigul, noted, “Indian IT stocks faced heavy selling during the last trading session of 2024, contributing to a broad market correction in the Sensex and Nifty indices.” He further explained that the sharp sell-off reflects broader market concerns, including FII selling driven by high US bond yields and a strong dollar. The overall market sentiment remains cautious going into 2025, as stretched valuations and high uncertainty continue to hold back domestic institutional investors and high-net-worth individuals from accumulating positions.
Looking ahead, the Q3 earnings season, starting January 10, will be crucial for identifying companies that can maintain strong performance despite the growth slowdown.
Q3 Earnings Season Timeline
HCL Technologies will kick off the Q3 earnings season on January 13, 2025, followed by Infosys, which is set to announce its earnings on January 16.
Disclaimer:Disclaimer: The views and investment tips by experts in this News18.com report are their own and not those of the website or its management. Users are advised to check with certified experts before taking any investment decisions.