Nifty IT index plunges 3.2%, posts biggest single-day fall in 3 months

Mumbai: The Nifty IT or information technology index posted its biggest single-day decline in three months on Wednesday, with individual stocks falling as much as 5%, reversing some of the recent gains, as renewed risk-off sentiment in Indian equities and concerns over interest rate hike in the US triggered a sell-off.

The Nifty IT index fell 3.2% on Wednesday, compared with a 0.9% decline in the benchmark Nifty 50. Among stocks, Coforge fell the most, down 5.4%, followed by Infosys, HCL Tech and Tech Mahindra, which declined 3.3-4.3%.

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Sumit Pokharna, vice-president - Fundamental Research at Kotak Securities, said multiple factors are weighing on Indian IT companies, including rising geopolitical tensions and higher oil prices. "This could fuel inflation and strengthen expectations of a Fed rate hike or hawkish commentary, which would in turn reduce US IT spending," he said. "Higher US H-1B visa costs and continued concerns around generative AI disruption are adding to the pressure on IT players."

Crude oil November futures were trading at $100.4 a barrel on Wednesday evening, crossing the $100 mark for the first time since May this year.