IT stocks drag Sensex, Nifty lower as Infosys, TCS slump
What's the story
India's stock market opened on a weak note today, with both the Sensex and Nifty struggling for direction. The fall comes as global tech stocks continue to struggle, affecting domestic sentiment. At the time of writing, Sensex was trading at 83,645.60 points after losing 93.53 points. Nifty IT Index was down 5.22% to 36,595 with IT majors like Infosys and TCS plummeting by up to 6%.
Market forecast
IT Index likely to be under pressure
The market's cautious tone comes after a sharp rebound on Wednesday. However, analysts believe it may be difficult to sustain the upward trend. Dr. VK Vijayakumar, Chief Investment Strategist at Geojit Investments Limited, has warned that the rally driven by the India-US trade deal could face resistance. He said overnight selloff in US tech stocks will also impact Indian IT index and limit market gains.
Policy impact
MPC unlikely to provide support
Vijayakumar also said that monetary policy won't provide much support as the MPC is likely to keep its stance unchanged. He said, "A trigger from monetary policy scheduled on February 6 is unlikely since the MPC is expected to retain the rates and stance with a dovish tone." The strategist further added Wednesday's 639-point surge was mostly due to FII short covering and ₹5,236 crore of buying in cash market rather than fundamental strength.
Market trends
Nifty may see restricted downside unless key levels break
Anand James, Chief Market Strategist at Geojit Investments Limited, said Nifty may see restricted downside unless key levels break. He said yesterday's close near 25,700 raises the possibility of such an outcome today. However, he doesn't see enough signals to support an outright slippage. With mixed global cues and sector-specific pressure—especially in IT—the market is likely to remain choppy throughout the day.