Nifty IT in a free fall, index dips over 730 pts as investors gear up for Q3 earnings; Tech Mahindra, HCL Tech, Infosys, TCS top bears

6 Jan 2022 , 01:19 PM

IT stocks were in a free fall on Thursday as investors carried steep profit booking while gearing up for the onset of earnings season for the quarter ending December 2021 (Q3FY22). Also, contraction in global tech stocks and acceleration in treasury yields further added to the woe. Nifty IT was among the top bears on NSE. Except for Coforge, all other stocks were in the red with heavyweights dragging the most.

At around 1.09 pm, Nifty IT was trading at 37,876.85 nosediving by 732.30 points or 1.90%. The index has touched an intraday high and low of 38,206.60 and 37,757.20.

Tech Mahindra, HCL Tech and Infosys were top bears plunging by more than 2% each. TCS dived 1.9%. Mindtree and L&T Infotech dipped 1.8% each, while L&T Technology Services shed 1.6%.

Mphasis and Wipro slipped more than 1% each.

On the contrary, Coforge was marginally up and was the only gainer.

In the past few months, IT stocks had dominated the majority of markets rally and they have risen better than the street’s expectations. The current bearish run in the basket is due to investors cashing in gains ahead of the quarterly earnings.

Indian IT sector is well poised going forward due to healthy order book, hopes for solid top-line growth across geographies and amid huge cost optimisation. Diversification and advancement in digitisation and acceleration in automation are one of the key strengths for the sector in 2022.

As per stock exchange data, TCS and peers Wipro and Infosys will announce their Q3 results on January 12. While HCL Tech will announce its Q3 earnings on January 14.

A steep sell-off in global tech stocks and a spike in treasury yields took a major toll on stock markets globally as investors reacted to US Federal Reserve’s meeting minutes where it signalled to hike interest rates faster than expected due to inflationary pressures.