Indian IT stocks witnessed sharp selling pressure on Friday, dragging the Nifty IT index down by nearly 3 per cent even as the broader market remained positive.
Weak investor sentiment and continued institutional selling weighed heavily on major IT companies during intra-day trade.
By 12:34 PM, the Nifty IT index was trading at around 30,763.90, down 2.76 per cent. The index opened marginally lower at 31,533.35 but quickly slipped into negative territory as selling intensified through the morning session.
Market sentiment remained distinctly bearish, with all 10 constituents of the index trading in the red. The decline stood in contrast to the overall market trend, where benchmark indices showed gains, indicating sector-specific weakness in IT stocks.
The downturn was largely led by index heavyweights Infosys and Tata Consultancy Services, which together hold significant weightage in the index.
Infosys shares dropped over 3 per cent to trade at approximately Rs 1,284, while TCS also declined more than 3 per cent, hovering near the Rs 2,505 mark during intra-day trading. The sharp fall in these two major stocks played a key role in pulling the entire index lower.
On Thursday, TCS had announced its quarterly results, with its board approving a final dividend of Rs 31 per share. However, the announcement did little to lift investor sentiment amid broader concerns.
The selling pressure was not limited to large-cap companies. Mid-tier IT firms also witnessed notable declines, reflecting widespread weakness across the sector.
Coforge emerged as the top loser on the index, falling 3.75 per cent to Rs 1,217.50. Mphasis dropped 3.19 per cent to Rs 2,309.30, while Larsen & Toubro Infotech slipped 2.77 per cent to Rs 4,445.50.
The across-the-board decline indicates that investors are adopting a cautious approach toward the IT sector, particularly amid global uncertainties and concerns about future demand.
Despite the weakness in IT stocks, the broader market showed resilience. The BSE Sensex was trading at 77,180.16, up by 548.51 points or 0.72 per cent. Similarly, the NSE Nifty50 rose to 23,938.95, gaining 163.85 points or 0.69 per cent.
The divergence between IT stocks and the broader market suggests sector-specific concerns rather than a market-wide downturn.
Investors are also keeping a close watch on the fragile geopolitical situation in West Asia, which continues to add to market uncertainty. Such global factors often impact export-oriented sectors like IT, as they rely heavily on international clients and stable economic conditions.
The sharp fall in IT stocks highlights the vulnerability of the sector to both global uncertainties and investor sentiment. While the broader market remains upbeat, continued pressure on IT heavyweights like Infosys and TCS could keep the Nifty IT index under stress in the near term.