Sensex, Nifty plunge over 700 points as IT stocks crash
What's the story
The Indian stock market witnessed a sharp decline in early trade on Friday, breaking a five-day winning streak. The S&P BSE Sensex fell by 724.34 points or 0.94% to 76,685.64 while the NSE Nifty50 slipped by 201.7 points or 0.83% to 23,966.30 soon after opening bell. The fall was mainly led by a massive selloff in information technology (IT) stocks after global tech giant Accenture cut its revenue guidance and provided a weaker-than-expected outlook for the industry.
Market reaction
Accenture's weaker-than-expected outlook triggers global IT selloff
Accenture has revised its annual revenue growth forecast to 3% to 4% in constant currency terms, down from the previous estimate of 3% to 5%. The company expects fourth-quarter revenue in the range of $17.75 billion-$18.4 billion, lower than analysts' average estimate of $18.47 billion. This news triggered a massive selloff across IT services and consulting companies globally, including Indian tech giants like Infosys and TCS.
Stock performance
Infosys falls over 7%
Infosys was the biggest loser on the Sensex, falling by 7.84%. Other major players like TCS, Tech Mahindra, and HCLTech also witnessed sharp declines of over 5% each. The negative sentiment from Accenture's revised guidance impacted all Nifty IT constituents with Mphasis, Persistent Systems, and Wipro also declining over 4% each. On Thursday, Infosys and Wipro's American Depository Receipts (ADRs) fell up to 10% after Accenture's revised guidance.
Market outlook
NTPC, Sun Pharma gain
The weakness in technology stocks affected the broader market, wiping out gains across several sectors. However, some pockets remained resilient despite the selloff. NTPC gained 1.01%, Sun Pharma rose 0.60%, Power Grid added 0.49% while Trent and Bharti Airtel advanced by 0.42% each. Reliance Industries also traded positively ahead of its AGM later today where announcements regarding its new energy business and potential Jio IPO timeline are expected to be made.