Nifty IT index plunges 3.2%, posts biggest single-day fall in 3 months
The Nifty IT index experienced its largest single-day drop in three months on Wednesday. Several IT stocks saw significant declines, reversing recent gains in the market. Renewed risk-off sentiment and US interest rate hike worries triggered the broad sell-off. Geopolitical tensions and rising oil prices also contributed to the pressure on IT firms. Concerns over H-1B visa costs and generative AI…
Mumbai experienced a significant downturn in the Nifty IT index on Wednesday, marking its largest single-day decline in the past three months, according to data reported Wednesday. This decline came as a result of increased risk-averse tendencies in Indian equities and worries about a potential interest rate increase in the United States.
The Nifty IT index plummeted by 3.2%, in contrast to a 0.9% decline in the benchmark Nifty 50 index. Among the affected companies, Coforge witnessed the most substantial drop, plummeting by 5.4%, followed by Infosys, HCL Technologies, and Tech Mahindra, which each fell between 3.3% to 4.3%. Sumit Pokharna, the vice-president of Fundamental Research at Kotak Securities, attributed the downturn to a confluence of factors such as escalating geopolitical tensions, elevated oil prices, which could spur inflation and heighten expectations of a Federal Reserve rate hike or cautious statements.
Additionally, higher visa costs for H-1B workers and ongoing apprehensions regarding the impact of generative AI were further exacerbating the pressure on IT firms. On Wednesday evening, the November crude oil futures were quoted at $100.4 a barrel, surpassing the $100 threshold for the first time since May of this year.
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