Mumbai, June 19: A significant sell-off in IT shares occurred on Friday after global technology services firm Accenture revised its revenue growth forecast downward and indicated weak demand. This led to the Nifty IT index plummeting by over 6%, raising investor concerns about the pace of recovery in global tech spending.
During early trading, the IT index fell by 6.43%, or 1,831 points, reaching a low of 26,634.50. It was the worst-performing sectoral index at that time.
By the time of this report, the Nifty IT index was trading down by more than 5%, or 1,500 points, at 26,956.90.
Infosys led the sell-off, with its shares dropping by 7.4%. Tata Consultancy Services (TCS) saw a decline of 5.9%, while Tech Mahindra and HCL Tech fell by 4.5% and 4%, respectively.
Additionally, Persistent Systems’ shares fell nearly 5%, and LTI Mindtree dropped by over 4%. Coforge and Wipro also experienced declines of around 4% and more than 3%, respectively.
The sell-off impacted the broader market as well. In the BSE Midcap index, IT stocks like KPIT Technologies, Tata Elxsi, Hexaware Technologies, and L&T Technology Services were among the biggest losers, recording significant declines.
This downturn followed a sharp drop in Accenture’s shares overnight and a decline in the American Depositary Receipts (ADRs) of Indian IT companies.
Accenture has lowered its revenue growth forecast for the fiscal year 2026, prompting increased selling pressure on the ADRs of Indian IT firms.
Market experts noted that Accenture’s weak forecast has fueled selling in the ADRs of Indian IT companies. They suggested that buying at lower levels might occur as valuations become attractive. However, they cautioned that if earnings estimates continue to decline in the future, pressure on IT shares could persist.
Despite the recent sharp decline, experts indicated that Indian IT companies are still valued higher than Accenture, which is currently trading at about nine times its projected earnings for the next year.
Given the current uncertainties, analysts have maintained a cautious outlook on the sector. Accenture’s shares fell nearly 18% overnight, while Infosys’ ADRs dropped by about 10% and Wipro’s ADRs fell by over 3%.
The company reported $18.7 billion in revenue for the third quarter but lowered its growth forecast for the year due to ongoing uncertainty in customer spending and revenue pressures related to events in West Asia. Moreover, the company’s new bookings were also lower compared to the previous year.
This decline in IT shares comes at a time when the sector was already under pressure following signals from the U.S. Federal Reserve earlier this week. The Fed indicated that interest rates may remain high for an extended period, weakening investor sentiment towards global IT stocks.
Over the past year, the Nifty IT index has fallen nearly 30% from its level of 38,600.
In morning trading, major indices in the domestic stock market also showed weakness. The Sensex dropped by over 700 points, while the Nifty fell nearly 200 points, slipping below the 24,000 mark.
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