Why is stock market crashing today? Snapping its longest winning streak in over two years, Sensex on Monday lost nearly 950 points as IT stocks faced investor wrath. Infosys share price hit a 52-week low of Rs 1,185.30 on the NSE as the shares of India s second-largest IT company tanked 15% on below par Q4 earnings. Watch this Business Today Visual Story to check key factors dragging markets today.
A host of IT counters, including some bluechip names, dropped sharply lower on Monday after the disappointing performance by Infosys in the March 2023 quarter.
Sensex and Nifty 50 stumbled by more than 1% on Monday after investors carried panic selling in IT stocks as concerns escalated following a disappointing fourth quarter by tech giants like TCS and Infosys. Markets were on a winning spree from March 29th to April 13 before correcting.
Despite witnessing a broader buying especially in FMCG and oil stocks, Sensex and Nifty 50 halted their 9 days of rally on Monday. IT stocks emerged as the major draggers after a disappointing Q4 prints of TCS and Infosys. All IT stocks were in the red.
Shares of IT firms have lost ground despite the rupee slipping in the last five sessions. Usually, rupee and IT stocks share an inverse relationship. When rupee falls, IT sector stocks rise on prospects of increased earnings since most of them deal in outsourcing of business from overseas clients and earn in dollars. On the other hand, when rupee rises, IT shares fall.
However, this time, the fall in rupee has been accompanied by a decline in IT stocks.
The rupee, which closed at 79.25 to the dollar on July 8 has fallen to 79.92 today, losing 67 paise during the period amid a stronger greenback in the overseas market. An expected fall in the current account deficit and FIIs outflows have also led to weakening of sentiment around the local currency.