Nifty IT index falls for 6th consecutive session
What's the story
The Nifty IT index fell by 0.6% today, extending its losing streak to six consecutive sessions. The index has lost a total of 4% during this period. Infosys and Tata Consultancy Services (TCS) were the main contributors to this decline, with their stocks falling by 2% and 0.5%, respectively. Oracle Financial Services Software also saw a major drop of 5%.
Market factors
IT stocks affected by inflationary concerns
The decline in the Nifty IT index can be attributed to inflationary concerns. Crude prices have crossed $100 per barrel, raising fears of rising inflation.
Higher interest rates in the US could also affect demand for Indian IT services.
This has led to a sell-off in bonds, pushing long-dated US Treasury yields to their highest levels in over two decades and boosting the dollar index.
Economic projections
US interest rates expected to remain high for longer
Expectations of a prolonged period of high US interest rates have strengthened after two Federal Reserve policymakers hinted at the need for more hikes to tackle stubbornly high inflation.
The markets are currently pricing in a nearly 69% chance of a US rate hike in October, according to CME's FedWatch Tool.
Meanwhile, the dollar index has risen over 1% this week to a two-month high, its first back-to-back weekly gains since June.