Shares of IT companies continued to witness heavy selling pressure in the stock market on Tuesday amid the global chill caused by the credit rating downgrade of the U.S., from where these companies earn about 60 per cent of their revenues.
Shares of blue-chips like TCS, Wipro and Infosys bore the brunt of the bearish trading sentiment and fell sharply on the bourses.
TCS, the country’s’ largest IT exporter, plunged by 6.46 per cent to hit an early low of Rs 948 on the BSE. Similarly, IT bellwether Infosys lost 4.78 per cent to touch a one-year low of Rs 2,350.
Wipro, India’s third largest IT exporter, too, witnessed massive selling pressure and fell by 5.28 per cent to hit an early low of Rs 339.70.
Investors also dumped the stocks of other IT companies that have significant export exposure to the US and Europe. In early trade, HCL Tech shed 3.99 per cent, Tech Mahindra slipped by 2.84 per cent and Patni Computer went down by 1.91 per cent.
Led by losses in these stocks, the BSE IT index fell to a 52-week low of 5,036.05 and was the worst-performing index among the 13 sectoral indices on the Bombay Stock Exchange.
Analysts said that stocks of export-focused sectors were among the worst affected, as the US and Europe are the main overseas buyers of Indian goods.
“For exporting companies like TCS, Infosys and Wipro, the outlook seems to be negative at the moment in the wake of the slowdown in the euro zone and uncertainty in the US,” an expert said.
Global markets have been in a turmoil for the past two days after the creditworthiness of the US was downgraded by Standard and Poor’s amid the American economy’s mounting debt worries.
The BSE benchmark Sensex dropped 558 points in opening trade today, while the NSE’s Nifty index slipped below the 5,000-mark.