IT Stocks are dragging Indian Stock market
Indian shares extended losses for the third session in a row on Wednesday, dragged by IT stocks and the lack of any fresh triggers to offset the downbeat sentiment after a lackluster start to the earnings season.
Since TCS’s results last Wednesday, the Nifty IT index has tumbled nearly 8%, while the benchmark Nifty 50 has lost just over 1%. Infosys stock has been falling since the start of this week after the IT giant posted weak Q4 earnings last week. The share price of Infosys dropped by an unprecedented level on Monday to touch a fresh 52-week low with investors losing ₹58,000 crore or value.
Q4 RESULTS AND MARKET REACTION
Meanwhile, LIC increased its stake in the company in Q4, while promoters and mutual funds have also done the same. However, foreign and institutional investors had reduced their exposure to the company during the quarter.
Indian tech firms have been trading extremely volatile this week sparkled after TCS and Infosys posted lower-than-expected Q4 earnings. Wednesday was no different, as the majority of IT stocks are in the red with HCL Tech’s Q4 earnings in focus. It is expected that TCS and Infosys are not the only ones to see a slowdown in the US performance, others are likely to follow suit in the last quarter of FY23.
But that’s not all, the banking crisis in US and Europe is expected to even impact the first quarter of FY24.
The (benchmark) index has got an important near-term support at 17,500-17,550 and resistance at 17,800 levels. The markets are likely to stay choppy, with earnings the only major trigger until the U.S. Federal Reserve’s interest rate decision on May 3.
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