IT Stocks Slide: Tech Mahindra, Infosys, Wipro Among Top Losers Amid US Fiscal Concerns

Market Performance

Indian IT stocks took a sharp hit on May 22, mirroring the slump on Wall Street triggered by rising concerns around the US federal deficit.

• Nifty IT Index dropped by 1.4% in early trade
• Broader indices, Sensex and Nifty, also opened in red
• Global markets, including Nikkei 225, Kospi, Kosdaq, and Hang Seng, also tumbled by over 1%

The sell-off was sparked by investor anxiety over the potential increase in the US government's fiscal deficit, driven by a proposed tax cut plan under discussion by US lawmakers.

Main News

The weakness in the US bond market—fueled by fears of ballooning federal deficits and last week's Moody's downgrade of US debt—sent shockwaves across global financial markets.

IT stocks, heavily reliant on the US for revenues, were among the worst hit.

Here's how major IT stocks performed:

• Tech Mahindra's share price fell over 2%, trading at ₹1,564.70
• Persistent Systems, HCL Tech, and Mphasis share prices dropped over 2% each
• Infosys and TCS declined more than 1.4%
• Wipro's share price was down by over 1%
• LTI Mindtree and Coforge's share prices traded in the red with marginal losses

The collective decline underlines the sensitivity of Indian IT stocks to global economic developments, particularly in the US.

Company Details

Indian IT firms, including Tech Mahindra, Infosys, Persistent Systems, HCL Tech, Mphasis, Wipro, LTI Mindtree, and Coforge, derive a significant share of revenue from the US market.

With the US economy facing potential headwinds, concerns around project delays and client spending cuts are now back in focus.

Earlier volatility in the IT sector had already heightened after Moody's downgraded the US credit rating from AAA to AA1, citing fiscal deficits and high refinancing costs.

Summary of the Article

The share prices of top Indian IT firms, including Tech Mahindra, Infosys, HCL Tech, Mphasis, Persistent Systems, Wipro, LTI Mindtree, and Coforge, took a beating on May 22.

The dip reflects investor fears surrounding US fiscal instability and its ripple effects on Indian tech exports.

With IT being a crucial sector for India's economy, continued volatility is likely in the near term as global financial uncertainty persists.