Indian Markets Set to Open Volatile as IT Giants Disappoint

Indian Markets Set to Open Volatile as IT Giants Disappoint

VoM News Desk | October 13, 2023 | 11:01 AM IST | Breaking News | Follow on Google News

Indian Markets Set to Open Volatile as IT Giants Disappoint

Indian Markets Set to Open Volatile as IT Giants Disappoint

Gift Nifty futures traded lower late in the evening on October 12th, suggesting a potentially rocky start for the Indian markets on Friday, with expectations of increased volatility. This downturn can be attributed to the underwhelming results reported by IT giants, Infosys (Infy) and Tata Consultancy Services (TCS).

The Gift Nifty futures were down by 84 points compared to the Nifty closing at 19,794 on Thursday evening. Notably, Infy’s American Depository Receipts (ADR) were trading 6.62% lower at $16.45, largely in response to the company’s decision to reduce its revenue guidance for FY24. This disappointing news came a day after TCS failed to meet analyst expectations for both revenue and profit, resulting in a 1.85% decline in TCS stock, which closed at ₹3543 on Thursday.

Challenges for IT Giants Impacting the Market

“The market is likely to remain under pressure due to the underperformance of the IT majors,” commented Dhiraj Relli, MD & CEO of HDFC Securities. The challenge of higher interest rates in the US, along with contract renegotiations, will continue to loom over the market. Independent market analyst Ambareesh Baliga also foresees pressure on IT stocks at the opening of the market on Friday, citing foreign portfolio investors (FPI) selling as a contributing factor.

FPIs sold a provisional ₹1862.6 crore on the market and index futures worth ₹253 crore on Thursday. Companies such as Infosys and HCL Technologies stated that their revenue growth for 2023-24 is expected to be weaker than previously forecasted due to their large foreign clients adopting a more conservative approach amid economic uncertainties.

Tata Consultancy Services, India’s largest tech services company, has already experienced a decline in revenue during the second quarter. This signals a potentially challenging year for at least three of India’s Big Five tech companies. While Infosys and HCL outperformed analysts’ expectations in the September quarter, concerns remain about the companies’ outlook and management commentary for the second half of the year.

The disappointing performance of IT giants and the global economic landscape are expected to impact the Indian stock market and potentially lead to a period of uncertainty and volatility in the near future.

VoM News Desk

VoM News is an online web portal in jammu Kashmir offers regional, National & global news.