Nifty IT index slips 2.90% to hit a 9-week low; TCS shares drop by 4.3%

Consequently, the Nifty IT index plummeted by 2.90% to 35,808 points during the session, marking a significant decline to reach a 9-week low. This fall pushed the index to correct 7.13% from its 2024 high of 38559 points. 

The sector’s sentiment remains sour ahead of the Federal Reserve’s rate decision, which is scheduled to be held on March 19 and 20, 2024, with widespread expectations that the US central bank will maintain interest rates at their current level. 

Also Read: US Fed meet begins today: 3 key things that may influence Fed’s policy decision

However, all eyes will be on any indications regarding the timing and magnitude of potential easing measures anticipated from the Fed later this year. 

Recent data revealed that US producer prices surpassed expectations in February, both on a monthly and annual basis. This followed earlier data indicating that US consumer prices exceeded forecasts last month, reaching 3.2%. 

Also Read: Why is Indian stock market down today — explained with 5 crucial reasons

Drawing insights from these trends, investors are anticipating that the Federal Reserve may not implement immediate rate cuts. Since March 2022, the U.S. central bank has raised its policy rate by 525 basis points to the current 5.25% to 5.50% range. 

Among individual stocks, TCS emerged as the biggest underperformer, declining by 4.3% to ₹3,972 per share, recording the biggest intraday drop since September 2022. 

This decline occurred following a significant transaction where 2.02 million shares, representing 0.6% of equity, changed hands in a block deal window on Wednesday. The total value of this transaction was ₹9,000 crore. 

Also Read: TCS share price drops 3% after Tata Sons stake sale news. Buy or wait?

Reports suggest that Tata Sons, the holding company of the Tata Group, is potentially the seller in this transaction. Earlier, it was reported that Tata Sons was looking to offload a stake in TCS for about ₹9,362 crore. According to Trendlyne shareholding data, Tata Sons holds a 72.38% stake in TCS.

Meanwhile, other IT stocks such as L&T Technology Services, Infosys, Wipro, Coforge, HCL Technologies, Persistent Systems, and MphasiS closed with a drop of over 2%. Similarly, Tech Mahindra and LTIMindtree ended the session with over 1.5% lower. 

Disclaimer: We advise investors to check with certified experts before taking any investment decisions.

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Published: 19 Mar 2024, 03:51 PM IST