The Nifty IT index has declined for the last six trading sessions—its longest losing streak since September 2017.
After two successive months of gain in 2019, the index is down over 3 percent in March so far, which is its highest monthly loss since October 2018.
That's mainly due to the appreciation in the rupee and strong foreign inflows, according to Sanjiv Bhasin, executive vice president of markets at IIFL. “This comes at a time when foreign inflows into Indian equity markets hit their highest mark since November 2017.”
The rupee has strengthened over 1.5 percent in March, turning net positive for the year.
Ashwin Mehta, analyst at Nomura, is cautious on the information technology sector. “We retain our cautious stance on demand for Tier-1 IT on account of weakness in HPS (health plan services) vertical, due to weaker U.S. federal business; weakness in BFSI (banking financial services and insurance) sector, led by contraction in Europe and banking & capital markets, coupled with modest growth in the Americas.”
Companies like Infosys Ltd., HCL Technologies Ltd., Tech Mahindra Ltd. and Wipro Ltd.—which have a 69 percent weightage on the index—have declined between 3.5 and 6.8 percent this month.
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