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Nifty IT tanks 4%, Infosys, Wipro, TCS shares bleed; why tech stocks are falling

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Tech stocks decline: The downtrend in India's IT stocks like Infosys, Wipro, HCL Tech and TCS, reflects the trend on the tech-heavy Nasdaq index in the US, where investors booked profits for the highly valued tech and platform companies ahead of the Fed announcement.

Nifty IT tanks 4%, Infosys, Wipro, TCS shares bleed; why tech stocks are falling
Nifty IT index settled more than 3 percent lower on Thursday, extending the recent downtrend amid persisting volatility in markets. The IT sector gauge plunged to become the worst-performing sector in today’s session, crashing more than 1,200 points or 4 percent in intraday trade as investor sentiment remained subdued over a hawkish fed stance.
Nifty IT was down 3.55 percent or 1,232.40 points to 33,475 at the close, with Coforge and Mindtree being the top losers, falling 7.97 percent and 6.51 percent, respectively.
All 10 stocks in the IT pack were in the red with losses ranging between percent 2 percent and 8 percent. Heavyweights like Infosys, Tata Consultancy Services (TCS), and Wipro also witnessed heavy selling. Overall, more than 4.93 crore shares of Nifty constituents, valued at over Rs 7.95 lakh, changed hands, NSE data showed.
Infosys shares declined more than 3 percent to an intraday low of Rs 1,665 on the National Stock Exchange (NSE). The stock, which has fallen more than 8 percent in the past 5 days, ended the session 2.04 percent lower at Rs 1,686.95.
Tech giant TCS’ share price, which fell 3.84 percent in intraday, ended at Rs 3,652.00, over 115 points or 3.13 percent lower from the previous close.
Wipro shares too witnessed a steep correction with the stock falling 4.5 percent in intraday trade. At close, the stock was down 3.09 percent at Rs 545.30.
The downtrend in IT stocks in India reflects the trend on the tech-heavy Nasdaq index in the US, where investors booked profits for the highly valued tech and platform companies ahead of the Fed announcement. However, post Powell’s indication on rate hikes to tame inflation on Wednesday, the scrip ended marginally higher. It was up 0.021 percent at 13,542.12 at the close.
Dr. VK Vijayakumar, chief investment strategist at Geojit Financial Services cited the correction phase in the market and foreign institutional investors (FIIs) turning into major sellers as the reasons for the decline.
“They (FIIs) are sitting on big profits in IT and are booking profits irrespective of the performance and prospects of the sector. The IT sector is on a multi-year expansion cycle and, therefore, the outlook for the sector is bright,” Vijayakumar told CNBCTV18.com.
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