IT stocks plunge led by selloff in Tech Mahindra shares; Nifty IT index down over 1.4%

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Tech Mahindra's disappointing earnings, the Nifty IT index plummeted more than 1% on Thursday's trade amid an overall gloomy market environment. Among the top laggards of the Nifty IT index were shares of Persistent Systems Ltd (down 3.07%), Tech Mahindra Ltd (down 2.91%), and Coforge Ltd (down 1.95%). Analysts witnessed selling pressure to continue in the IT Index following the release of lower-than-expected earnings from major IT companies, along with lower guidance indicating less spending for the upcoming year.

Tech Mahindra shares today was also one of the Nifty 50 index's biggest laggards. At 10:54 IST, Nifty IT was down 1.34% on Thursday session. Nifty IT index touched intraday high of 30,299.55 level and low of 30,086.90 level.

Shares of LTIMindtree Ltd, L&T Technology Services Ltd, Mphasis Ltd, Wipro Ltd, and Tata Consultancy Services Ltd was down over 1%-2%. “Poor results from most of the IT majors like TCS, Tech Mahindra, Sonata Software, Infosys has made to he market jittery about IT companies, and hence the IT Index is down. We continue to remain negative on the sector for the medium term while the long term view remains neutral," analysts said.

According to Amit Trivedi , CMT, Vice President - Research at YES Securities, after five months up move; IT index failed to sustain at higher levels, further under -performance from the IT index is possible. Comparatively, HCL Technology is looking stable and can be be bought for medium to long term perspective. “The Nifty IT Index has broken below its immediate support at 30,500.