Shares of IT companies were the top losers on Monday after global credit rating agency Moody’s cut rating for long-term issuer and senior unsecured ratings of the United States from AAA to Aa1. The rating cut triggered weak sentiment for the stocks of Indian IT firms.
Moody’s cited the rise in government debt and interest payment ratios -significantly more than similarly rated sovereigns, as reasons for its US rating cut.
Gaurav Garg from Lemonn Markets Desk said, “Global markets echoed this nervousness. Asian and European equities traded mostly lower, weighed down by mixed economic signals from both the US and China. US stock futures also pointed to a weak open. Indian IT stocks fell over 1%, reacting to concerns over the health of the US economy. Given IT sector’s significant 11.11% weight in the Nifty50, this sector’s decline exerted meaningful downward pressure on the index.”
US is a major market for the exports of Indian IT firms. In fact, US remains the largest market, accounting for nearly 70 per cent of India’s IT export revenue.
The BSE IT index slipped 477 pts or 1.28% to 36,919 and Nifty IT index lost 494 pts to 37,477. IT shares and Capital goods stocks were the only sectoral losers on Indian bourses today.
Infosys (1.95%), TCS (1.20%), Tech Mahindra (1.19%) and HCL Technologies (0.66% )were the only Sensex losers from the IT pack.
Shares of Onward Technologies (5.71%), IKS (3.57%), Wipro (1.02%), Zaggle (2.92%), Mphasis (2.5%) Sonata Software (1.97%), Affle , Zensar Tech (2.27%), Coforge (1.66%) and KPIT Tech (1.56%) were among the top losers on the BSE IT index today.
Meanwhile, Sensex fell 271 points to 82,059 and Nifty lost 74 pts to 24,945 on Monday.
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