Benchmark stock market indices in India opened lower on Monday due to a sharp slide in IT stocks, led by TCS and Infosys, after they reported weaker-than-expected earnings for the last quarter. The S&P BSE Sensex was down by 1.21%, trading at 59,700.44 at 9:35 am, while the NSE Nifty 50 also fell over 1% to 17,639.75. Broader market indices also crashed in early trade and there was a sharp spike in volatility.
All 100 constituents of the Nifty IT index were bleeding in early trade and it was down nearly 7%. Infosys was the worst hit, with shares down nearly 12% after it reported weaker-than-expected earnings last week. Tech Mahindra also lost nearly 7% in early trade, while TCS was down 3%. The slide in IT stocks pulled down the overall market sentiments and resulted in a lackluster start to the week.
Nifty Realty and Nifty Auto were two of the top sectoral gainers, but they could not help offset the losses triggered by the slide in IT stocks. Power Grid Corporation, Ultratech Cement Co, IndusInd Bank, Nestle India, and Britannia were the top gainers on the Nifty 50 index, while technology stocks dominated the bottom of the index, with Infosys being the top loser followed by Tech Mahindra, HCL Tech, TCS, and Wipro.
Traders and investors are now worried about the overall Q4 performance as more companies continue to report weak results, which is impacting the broader market sentiments. Apart from the IT sector, subdued global equities also contributed to the weak sentiments on Dalal Street. However, some experts suggest that the markets may bounce back if there is a recovery in IT stocks as they have been significant contributors to the overall market performance in recent times.