IT stocks tumble on US credit downgrade; BSE IT index at 52-week low

hidden August 08, 2011 10:14:30 IST
IT stocks tumble on US credit downgrade; BSE IT index at 52-week low

Mumbai: Shares of IT companies, which earn a major chunk of their revenue from the US and the Europe, fell sharply on the bourses today on concerns over the US losing its top-notch credit rating due to mounting debts.

All the three top IT companies — TCS, Wipro and Infosys — witnessed a huge fall in their share prices in morning trade on the BSE.

Shares of the largest IT exporter TCS plunged 5.18 percent and were trading at Rs 1,002. Similarly, India's third largest IT company Wipro shed 5.53 percent and was quoting at Rs 347.65.

IT stocks tumble on US credit downgrade BSE IT index at 52week low

TCS, Infosys and Wipro rely on the US and European markets for about 60 per ent of their revenue. Reuters

The second-most weighted scrip on Sensex after RIL, Infosys dropped 4.51 percent to Rs 2,473.60.

Weakness was seen in the stocks of other IT companies as well, with Tech Mahindra, HCL Tech and Patni Computer losing up to 7 percent in early trade.

The sharp fall came after the US lost its 'AAA' credit rating for the first time in history, as ratings agency S&P was not convinced with the efforts being made to tackle the country's debt problems.

TCS, Infosys and Wipro rely on the US and European markets for about 60 per ent of their revenue. Led by losses in these stocks, the BSE IT index was trading down by 4.49 percent at 5,214 and was the poorest performer among the 13 sectoral indices. This marks a fresh 52-week low for the index.

Meanwhile, the BSE benchmark index Sensex lost more than 500 points within minutes of the market opening and was later trading at 16,890.31, down 415.56 points.

Watch video: Mohammed Apabhai of Citi said, declining crude and commodity prices should take off pressure in terms of inflation in India. He expects Nifty to see support at 5,000 level.

Updated Date:

Find latest and upcoming tech gadgets online on Tech2 Gadgets. Get technology news, gadgets reviews & ratings. Popular gadgets including laptop, tablet and mobile specifications, features, prices, comparison.

also read

TCS net  below estimates at Rs 2,439 cr; will Infosys be on top?
Business

TCS net below estimates at Rs 2,439 cr; will Infosys be on top?

Going forward, the analysts expect foreign exchange losses to have a significant impact on profit after tax

TCS Q3 up 23%, meets forecast
Investing

TCS Q3 up 23%, meets forecast

Tata Consultancy Services Ltd (TCS) reported a 23 percent rise in quarterly profit, meeting market estimates, as it won new outsourcing orders and a weaker rupee boosted margins.

Infosys shares fall over 4% in early trade after Q2 earnings; brokerages remained cautious post-earnings
Business

Infosys shares fall over 4% in early trade after Q2 earnings; brokerages remained cautious post-earnings

Infosys' consolidated net profit declined by 2.2% to Rs 4,019 crore for the July-September 2019 quarter