The Nifty IT index dropped significantly in the morning session, falling over two percent due to a sell-off in U.S. tech stocks. The sell-off in the Nasdaq Composite index, which is tech-heavy, affected global investor sentiment. Additionally, poor earnings results and a downbeat forecast from Wipro Ltd. further exacerbated the decline in Indian IT stocks.
Wipro’s Disappointing Earnings Impact Investor Sentiment
Wipro shares took a massive hit, sinking more than six percent following its disappointing Q4 results. The IT services giant also slashed its revenue guidance for the upcoming quarter, prompting brokerages to downgrade its stock. The muted demand environment and an uncertain outlook for growth weighed heavily on investor confidence. The company’s revised revenue forecast for the current quarter ranges between $2,505 million and $2,557 million, which implies a sequential decline of up to 3.5 percent in constant currency terms.
Wipro also mentioned the adverse effects of tariff-induced uncertainty on its key verticals such as consumer and manufacturing. The company revealed that some large transformation projects were paused, and discretionary demand from clients had been impacted. This further raised concerns about the company’s ability to maintain strong growth in the face of economic challenges.
Wipro’s Troubles Affect Broader IT Sector
The negative sentiment surrounding Wipro quickly spread to other Indian IT stocks that rely on the U.S. for a substantial portion of their revenue. By 9:40 a.m., the Nifty IT index had fallen 2.4 percent, hovering around the 32,500 mark. Other stocks like LTI Mindtree and HCL Tech also saw significant losses. The dip in the Nifty IT index was compounded by a broader market sell-off in the U.S., where concerns over tariffs and comments from U.S. Federal Reserve Chair Jerome Powell further dampened market sentiment.
On Wall Street, the tech-heavy Nasdaq Composite index fell by 3 percent, led by a sharp drop in Nvidia and other chipmakers. This sell-off was triggered by concerns over further curbs on Chinese exports, which added to the already existing trade tensions between the U.S. and China. Jerome Powell’s warning about inflation and his cautious stance on reducing interest rates also contributed to investor unease, further worsening the outlook for tech stocks globally.
Despite some resilience in India’s IT sector, the broader global uncertainties and negative cues from international markets are creating significant headwinds for domestic firms.
