Infosys, TCS, Coforge: IT stocks bleed after tech rout on Wall Street; NIFTY IT index falls 2%

In the opening deals, the NIFTY IT index was trading around 2% lower, with all the 10 constituents trading in the red. However, the stocks saw some recovery, and when last seen, the index was trading around 1.7% lower.

Nine out of 10 constituents were trading in the red.

The NIFTY IT index provides investors and market intermediaries with an appropriate benchmark that captures the performance of the IT segment of the market in India.

The only outlier was Persistent Systems, which was trading in the green—up 0.06%.

What happened in overnight trade on Wall Street

The US stock market suffered huge losses on Monday, March 10, as fears of a recession spooked investors.

On Friday, US Treasury Secretary Scott Bessent told CNBC that the new administration's cuts to government spending could cause an economic “detox period.”

Asked over the weekend whether he was expecting a recession in 2025, President Donald Trump told Fox News Channel: “I hate to predict things like that. There is a period of transition because what we're doing is very big. We're bringing wealth back to America. That's a big thing.” He then added, “It takes a little time. It takes a little time.”

The Dow Jones Industrial Average slipped 890.01 points, or 2.08%, to settle at 41,911.71, while the S&P 500 lost 155.64 points, or 2.70%, to end the session at 5,614.56 levels. The tech-heavy index, the Nasdaq Composite, dropped 727.90 points, or 4.00%, to 17,468.32.

The “Magnificent Seven” stocks led the declines Monday as investors dumped the group for perceived safer plays.

Tesla tumbled 15% for its worst day since 2020, while Alphabet and Meta fell more than 4%. Artificial intelligence darling Nvidia lost 5%. CNBC reported that Palantir Technologies, another once-loved stock by retail traders, was down 10%.

Indian IT sector trends

Crisil Ratings, in one of its reports, had said that it expects the Indian IT sector to grow at 5-7% in FY25, after a growth of 6% estimated to have been achieved in FY24.

The overall industry size is pegged at $250 billion and it creates over 50 lakh direct jobs.

"The slowdown in technology spend will continue this fiscal, weighing on the revenue growth of IT service providers," said Aditya Jhaver, director at Crisil.

The industry is, however, expected to sustain in the key metric of profitability, as the operating profit margins will be stable at 22-23 per cent, the agency said, attributing it to prudent management of employee costs.

Crisil added that the sectoral revenues achieved a compounded annual growth rate of 12% for the decade through FY24.

High interest rates and economic slowdown in client markets led to a modest single-digit growth in tech spends by companies in the banking, financial services and insurance (BFSI), retail, technology and communications sectors in FY24, the agency said.

It said these four sectors account for nearly two-thirds of the industry's revenues.