Stock Market Drops as Infosys and HCL Tech Forecast Slump

Written by The Anand Market

Updated on:

The Indian equity market faced a grim start on Friday, with the benchmark indices recording steep losses in early trade. The primary reason for this negative sentiment was the downward revision of growth forecasts for FY24 by IT giants Infosys and HCL Technologies. This news, combined with an upsurge in US bond yields and the somber mood in global markets, cast a shadow over investors.

Sensex Opens Lower

The S&P BSE Sensex commenced trading almost 500 points down at 65,895, but it later managed to recover some of its losses, hovering around 66,100. Meanwhile, the NSE Nifty 50 was teetering around the 19,700 mark, showing the vulnerability of the broader market.

Infosys Leads Losses

Among the key contributors to the market’s decline, Infosys took the lead by tumbling more than 2 percent. The pessimism extended to other major stocks like Axis Bank, Wipro, Tech Mahindra, ICICI Bank, and SBI, all of which registered substantial losses. In contrast, HCL Technologies stood as a beacon of hope, gaining 2.5 percent amidst the sea of red.

stock market drops as infosys and hcl tech forecast slump
Stock Market Drops As Infosys And Hcl Tech Forecast Slump

Global Headwinds

Overnight, the US stock indices, including the Dow Jones, Nasdaq, and the S&P 500, all fell by over 0.5 percent. The trigger for this drop was the release of data indicating that inflation in the US had increased slightly more than anticipated, rising by 0.4 percent on a month-on-month basis. This, in turn, led to a surge in US 10-year Treasury yields to a concerning 4.73 percent.

Asia also followed this negative trend. The Hang Seng index in Hong Kong dropped by 1.6 percent, while indices in South Korea (Kospi), Taiwan, and Singapore (Straits Times) all saw declines of over 0.5 percent each. The Nikkei in Japan was marginally in the red, suggesting a region-wide apprehension about the global economic outlook.

Also Read:   AI Stocks on the Rise: Unveiling 2 Tech Giants Set to Skyrocket!

Commodity Market Check

In the world of commodities, Brent Crude Oil prices exhibited a volatile trading session on Thursday, with prices fluctuating around $86 per barrel. This uncertainty in the oil market can be attributed to various factors, including geopolitical tensions, supply disruptions, and changes in global demand.

In contrast, the price of gold remained relatively stable, hovering around $1,885 an ounce. Investors often turn to gold as a safe-haven asset during times of economic uncertainty, and its resilience amid market turbulence reflects the ongoing concerns among market participants.

The Indian equity market’s vulnerability to domestic and international factors was clearly demonstrated today. The IT sector, which plays a significant role in the Indian economy, witnessed a slump in stocks following Infosys and HCL Technologies’ downgraded forecasts. Additionally, the ripple effect of global economic challenges, notably rising US bond yields and concerns about inflation, further exacerbated the market’s woes. As investors keep a close eye on developments both at home and abroad, the stock market’s performance remains closely tied to the ebbs and flows of the global financial landscape.