IT stocks under pressure; Infosys, Wipro down 2%

Shares of information technology (IT) companies were under pressure with Nifty IT index falling over 1% on Tuesday after Wall Street’s all major indices slid more than 2% on Monday, amid concerns about slowing economic growth ahead of a highly anticipated decision from the Federal Reserve on the course of US interest-rate hikes. The FOMC is scheduled to meet on Tuesday and Wednesday.

Infosys, Mindtree and Wipro were down 2% each, while NIIT Technologies, Tech Mahindra and Tata Consultancy Services (TCS) trading lower 1% each on the National Stock Exchange (NSE).

At 09:38 am; Nifty IT index was down 1.2% as compared to a 0.45% decline in the Nifty 50 index.

Infosys, the largest loser among Nifty IT index, was down 2% at Rs 680, falling 4% in past two trading days. The stock, however, had outperformed the market by surging 14% from its recent low of Rs 619 on November 21, as compared to a 2% rise in the benchmark index till Friday.

Wipro was, too, down 2% at Rs 333 in intra-day trade, after gaining 7% in the last three weeks.

A significant and faster-than-expected slowdown in the US/global economy, the rise in interest rates in the US and trade war with China could be the catalyst. Faster-than-expected return to Indian ‘financials’ as interest rates stabilise and stressed asset provisioning peaks are the major downside risks for IT sector, according to Nirmal Bang Equities.

Wipro Technologies (Wipro Ltd)