Key facts
- Indian IT stocks fell sharply on Wednesday.
- TCS, Infosys, HCL Tech, Wipro, and Tech Mahindra were among the decliners.
- The fall occurred after a three-day rally.
- The Nifty IT index slumped, dragging the broader market lower.
- Brokerages maintain a positive outlook citing resilient earnings and strong order books.
Indian IT stocks experienced a sharp decline on Wednesday, with companies like TCS, Infosys, HCL Tech, Wipro, and Tech Mahindra falling by up to 7%. This downturn followed a three-day rally in the sector. The Nifty IT index slumped, dragging the broader market lower, with analysts citing immense pressure and uncertainty driving liquidation. Despite ongoing concerns about potential disruptions from Artificial Intelligence (AI), several brokerages, including CLSA, Nuvama, and Choice Institutional Equities, maintain a positive outlook. They cite resilient earnings, robust order books, and expanding enterprise AI opportunities as reasons for their optimism. While the sector's recovery is questioned, significant further downside is not anticipated.