Shares of IT companies, which earn a major chunk of their revenue from the U.S. and the Europe, fell sharply on the bourses on Monday on concerns over the U.S. losing its top-notch credit rating due to mounting debts.
All the three top IT companies — TCS, Wipro and Infosys — witnessed a huge fall in their share prices in morning trade on the BSE.
Shares of the largest IT exporter TCS plunged by 5.18 per cent and were trading at Rs. 1,002. Similarly, India’s third largest IT company Wipro shed 5.53 per cent and was quoting at Rs. 347.65.
The second most weighted scrip on Sensex after RIL, Infosys dropped by 4.51 per cent to Rs. 2,473.60.
Weakness was seen in the stocks of other IT companies as well, with Tech Mahindra, HCL Tech and Patni Computer losing up to 7 per cent in early trade.
The sharp fall came after the U.S. lost its ‘AAA’ credit rating for the first time in history, as ratings agency S&P was not convinced with the efforts being made to tackle the country’s debt problems.
TCS, Infosys and Wipro rely on the U.S. and European markets for about 60 per cent of their revenue.
Led by losses in these stocks, the BSE IT index was trading down by 4.49 per cent at 5,214 and was the poorest performer among the 13 sectoral indices. This marks a fresh 52-week low for the index.