IT stocks fall amid recession fears

IT stocks, which earn a major part of their revenue from the US, fell sharply on Monday amid fears of a likely recession after tariff hikes by the Trump administration rattled global markets. The 30-share BSE Sensex crashed 2,226.79 points or 2.95% to settle at 73,137.90, recording its third day of decline. During the day, the index slumped 3,939.68 points or 5.22% to 71,425.01.

The NSE Nifty tumbled 742.85 points or 3.24% to settle at 22,161.60. Intra-day, the benchmark dropped 1,160.8 points or 5.06% to 21,743.65.

Shares of IT-enabled services firms Onward Technologies Ltd cracked 13.99% and Genesys International Corporation slumped 10.80% on the BSE.

The stock of Quick Heal Technologies tanked 9.63% , Zaggle Prepaid Ocean Services lost 9.53% , Datamatics Global Services dropped 9.08% , Newgen Software Technologies (7.94%), Intellect Design Arena (7.69%), Happiest Minds Technologies (6.36%), Sonata Software (6.28%), Tata Technologies (6.19%), and Mphasis Ltd (5.76%).

Among blue-chip stocks, shares of Infosys dropped 3.75%, HCL Technologies declined 3.27%, Tech Mahindra (2.47%), LTIMindtree (1.72%), Wipro (1.38%), and Tata Consultancy Services (0.69%).

The BSE IT index tanked 2.92% while teck lost 2.85%.

"IT index ended with over 2 per cent loss. In just three sessions, the index tumbled over 8% as investors have turned risk-averse amid concerns of a likely recession in the US, India's largest export market for tech services," Siddhartha Khemka, Head - Research, Wealth Management at Motilal Oswal Financial Services Ltd, said.

US markets ended significantly lower on Friday. The S&P 500 tanked 5.97%, Nasdaq composite slumped 5.82%, and the Dow tumbled 5.50% on Friday.

"The market fall today is clearly the fallout of what is happening in the global markets. The current investor sentiment is one that is characterised by uncertainty and hence fear," Shiv Chanani, Senior Fund Manager - Equity at Baroda BNP Paribas Mutual Fund, said.