Bengaluru January 13 2023: Indian shares were lower on Friday, dragged by IT after revenue forecasts of major tech firms underscored sustained challenges with deal wins in Europe.
The Nifty 50 index (.NSEI) was down 0.32% at 17,801.10 as of 10:30 a.m. IST, while the S&P BSE Sensex (.BSESN) declined 0.39% to 59,725.87. Both the indexes are set for their second straight weekly fall, if the losses hold.
"The market is reading into the commentary of IT companies more, which hint at delayed deal decisions, caution on IT spends from key markets like the U.S.," said Aishvarya Dadheech, director and fund manager at Ambit Asset Management.
"The sector is likely to see pain in the next few quarters and that is causing a slide in IT stocks," Dadheech said.
Meanwhile, data that showed domestic and U.S. inflation eased, capped some of the losses, and boosted expectations that central banks could slow the pace of interest rate hikes.
India's retail inflation for December came in below the Reserve Bank of India's upper tolerance level of the 2%-6% band for the second consecutive month, easing concerns over larger rate hikes.
IT stocks (.NIFTYIT) slid 1.3%, as heavyweight Infosys Ltd (INFY.NS) fell 0.6% after its revised revenue growth forecast disappointed investors.
IT was the worst-performing sector last year, plunging 26% compared with a 4.33% gain in the benchmark Nifty 50, over concerns of a slowdown in the United States and Europe from where they draw a bulk of revenue. Earnings updates of major IT firms pointed to slowing deal decisions in these markets.
Infosys said it expected revenue growth of 16% to 16.5% for the financial year to March, compared with its previous forecast of a 15-16% growth.
HCLTech (.HCLT.NS) declined 1.8% and was the top percentage loser on the Nifty 50 after it narrowed its full-year forecast, citing seasonal challenges.
Like market leader Tata Consultancy Services(TCS.NS), HCL also pointed to delays in decision-making in Europe.
Investors will now focus on Wipro Ltd's (WIPR.NS) earnings due later in the day.