- The Nifty IT index has fallen 15% from its peak, with further downside risks.
- Global concerns, including US inflation and potential tariff wars, weigh on sentiment.
- Several stocks, including Tata Chemicals and Bajaj Electricals, hit 52-week lows.
The Indian stock market is navigating a challenging phase as IT stocks experience a steep decline. The Nifty IT index, after showing resilience initially, has lost momentum and is now down over 15% from its December 2024 high.
Beyond the IT sector, broader market weakness has pushed several stocks to their lowest levels in a year. Tata Chemicals, Apollo Tyres, Bajaj Electricals, and Nilkamal are among those facing sharp declines due to weak earnings, regulatory challenges, and sector-specific concerns.
Stock Market on Edge: Nifty IT Plunges, Broader Market Struggles
IT stocks have entered a downward spiral, reflecting the broader market’s instability. Technical indicators show that the Nifty IT index is currently trading below key support levels, with further downside potential if selling pressure persists. Companies like Infosys, TCS, and HCL Technologies are struggling to find stability amid concerns over declining revenue growth from the US, their biggest market.
Meanwhile, inflationary pressures in the US have increased the risk of stagflation, further dampening investor sentiment. The latest US inflation report revealed the fastest price rise since August 2023, triggering fears that aggressive interest rate hikes may follow. This, combined with trade war uncertainties, could lead to reduced IT spending by US companies, impacting Indian IT firms.
The broader Indian stock market is also facing challenges, with over 100 stocks hitting 52-week lows. Companies in the chemical, manufacturing, and consumer goods sectors are witnessing a slowdown, driven by weak demand and regulatory headwinds. Tata Chemicals’ significant Q3 loss, Apollo Tyres’ restructuring, and Bajaj Electricals’ tax dispute have further added to market pessimism.
Despite the turbulence, some experts believe that long-term investors could find buying opportunities in select beaten-down stocks. However, with global uncertainties still at play, caution remains the prevailing sentiment among traders and analysts.
As the market grapples with economic and geopolitical uncertainties, investors must brace for further volatility. A potential recovery will depend on global stability, regulatory clarity, and IT sector resilience in the face of declining US demand.
“In the short run, the market is a voting machine, but in the long run, it is a weighing machine.” – Benjamin Graham.
