- Nifty IT index is down over 1.5% amid weak global market cues on Monday
- All stocks in the Nifty IT index are trading in the red during early trade
- Wipro leads losses with a drop of more than 4% among IT stocks
Nifty IT is enduring a tough start to the week, trading with immense pressure in trade on Monday. The index is down more than 1.5% amid weak global cues, including a sharp 4% fall in the Nasdaq Composite on Friday. All stocks in the Nifty IT index are trading in the red.
Wipro has emerged as the biggest loser in the IT pack, trading with cuts of more than 4%. TCS, Infosys and Persistent are also trading with losses of more than a percent. Tech Mahindra was the only stock trading in the green in the IT pack in early trade, but has now fallen into the red.
The sharp drawdown marks yet another bad day at the office for an index that has corrected as much as 24% on a year-to-date basis. Over a one-year period, the index has fallen more than 23%.
However, it must be noted that the Nifty IT index enjoyed a welcome rally last week, in the wake of Nvidia founder Jensen Huang's comments on AI and how software companies are here to stay. But the index saw profit-booking later in the week.
Speaking to NDTV Profit, Harshal Dasani, Business Head at InvAsset PMS, says the risk-reward has once again turned unfavourable for the IT pack.
"Nifty IT's risk-reward has turned unfavourable again. The recent bounce has behaved exactly like a dead-cat bounce: sharp, sentiment-led and quickly sold into.
"That tells us the market is not yet willing to underwrite a durable recovery in IT earnings. The sector is still dealing with weak discretionary technology spending, AI-led disruption to legacy outsourcing models and poor visibility on when revenue growth meaningfully improves," he said.
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