NIFTY IT index biggest sectoral loser even as broader markets gain; 9 of 10 stocks trade lower

Stock of information technology (IT) companies took a beating on Friday, May 9, even as broader equity markets traded in the green for the first time in six days.

The NIFTY IT index emerged as the biggest loser among sectoral indices on Friday, falling over 1.26% compared with its previous close, even as the benchmark NIFTY 50 was up 0.32% to 22,028.3 at 12:42 pm.

The only other sectoral index trading in the red was the NIFTY Realty, trading down 0.3%. All the remaining sectoral indices were trading in the green, with the NIFTY Metal and NIFTY Pharma being the top gainers, up 1.4% and 1.3%, respectively.

Among the NIFTY IT index constituents, all the stocks were trading in the red, except Coforge Ltd that was up nearly 3%. Persistent Systems Ltd was the top loser in the IT pack, down 2%. Persistent was followed by Tata Consultancy Services Ltd (down 1.6%) and Tech Mahindra Ltd (down 1.4%).

IT stocks were in focus on Thursday after the National Securities Depository Ltd (NSDL) data showed that foreign portfolio investors (FPIs) sold ₹4,915 crore worth shares in the IT sector in the second fortnight of April (between April 16 and April 30).

This comes after the first fortnight of the month saw an FPI outflow of ₹4,658 crore from the IT sector. Hence, a total of ₹9,573 crore worth of IT stocks were offloaded by FPIs in April.

As per experts, the selling by FPIs in April could have been triggered by the recent March quarter earnings announcement by bellwether companies like TCS, Infosys Ltd and Wipro Ltd, among others.

Investors took note of the weak revenue growth guidance by some large IT companies for the coming fiscal year even as Q4 growth rates met expectations.