Sensex, Nifty Decline As IT Stocks Tumble On Valuation Concerns
Indian shares fell notably on Friday, with IT stocks suffering heavy losses after analysts from brokerage Credit Suisse warned of a 10-27 percent valuation-led correction for India's top four IT companies.
The current valuations of major Indian IT companies are unsustainable and there is a high risk to revenue cut for financial year 2024 in case the U.S. economy tips into a recession, the brokerage firm said.
The benchmark S&P BSE Sensex plunged 682 points in intraday trading before recouping some loss to end the session down 389.01 points, or 0.62 percent, at 62,181.67.
The broader NSE Nifty index closed 112.75 points, or 0.61 percent, lower at 18,496.60, after hitting a low 18,410 earlier.
HCL Technologies slumped 6.5 percent after the company said it expects the revenue growth guidance for financial year 2023 to come at the lower end of its guidance.
TCS, Wipro, Infosys and Tech Mahindra fell between 1.8 percent and 3.5 percent.
Pharma and FMCG shares saw selective buying, with Dr Reddy's Laboratories, ITC, Sun Pharma and Nestle India rising 1-2 percent.
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