Led by Tata Consultancy Services (TCS) and Infosys,stocks of IT companies slumped on the bourses today as near-term growth prospects for these outsourcing firms looked bleak amid weak global economic scenario.
India largest software exporter Tata Consultancy Services fell as much as 2.30 per cent during the day before settling at Rs 1,242.20,down 1.43 per cent from its previous closing.
Similarly,Infosys settled for the day with a loss of over 0.21 per cent. During the day the stock had fell 0.96 per cent to a low of Rs 2,477 on the BSE.
Wipro settled for the day at Rs 400.65,up 0.10 per cent and HCL Technologies ended the day at Rs 484.20,higher by 0.02 per cent.
The BSE IT index suffered badly during the day and was one of the worst performer as it closed for the day at 5,720.60 points,down 0.50 per cent.
Market analysts attributed the fall in the counter to bleak growth prospects for these IT companies. Moreover the weak US economic data also acted as a drag for these companies — as the US is the biggest outsourcing market for the Indian IT firms.
The manufacturing activity in the United States declined in June,the first monthly contraction since the last three years.
Meanwhile,Australian brokerage house Macquarie yesterday downgraded the domestic information technology and financial sector stocks to “underweight” from “overweight” due to weaker growth prospects.
The Australian investment bank has also removed the country’s largest software exporter TCS from the top-10 investment ideas,and replaced it with ICICI Bank.
On Infosys,Macquarie feels the Bangalore-based company will further revise its growth forecast to around six per cent from 8-10 per cent for this fiscal.
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