Indian stocks tumble, IT sector hit, as big tech faces deal hurdles.
The Indian S&P BSE Sensex (.BSESN) was down 0.39% to 59,725.87 as of 10:30 a.m. IST, while the Nifty 50 index (.NSEI) was down 0.32% at 17,801.10. If the losses persist, both indices are on track to tumble for the second consecutive week.
“The market is leaning into the opinion of IT businesses more, which hint to prolonged deal approvals and prudence on IT spends from major markets like the U.S.,” said Aishvarya Dadheech, director and fund manager at Ambit Asset Management.
As per Dadheech, “the industry is likely to see hardship in the next quarter, which is triggering a decline in IT equities.”
Data suggesting a downturn in both domestic and U.S. inflation, however, helped to limit some of the losses and raised hopes that central banks will mitigate the rate of increases in interest rates.
For the second consecutive month, India’s retail inflation for December was below the Reserve Bank of India’s upper tolerance level of the 2%-6% band, allaying worries about more substantial rate increases.
IT equities (.NIFTYIT) declined 1.3%, with industry leader Infosys Ltd (INFY.NS) falling 0.6% after disappointing investors with its lowered revenue growth outlook.
Due to concerns about a downturn in the United States and Europe, where they source the preponderance of their revenue, the IT sector had the poorest performance last year, falling 26% compared to the benchmark Nifty 50’s gain of 4.33%. Major IT businesses’ earnings releases signaled that deal decisions in these areas were decelerating.
