IT stocks under pressure, Markets extend losses in Thursday tussle

  • After a volatile session, the benchmark indices closed in the red for the fourth straight day.
  • In all, 29 of the Nifty50 stocks closed lower. 
  • The rupee closed at a fresh low of 79.90 against the dollar, as compared to previous close of 79.81.

Among the Nifty sectoral indices, Oil and Gas (+1.3%) and Pharma (+0.7%) saw the most gains, while PSU Bank (-2.2%) and IT (-1.5%) were the top losers. 


15,938  28 (-0.1%)


53,416  98 (-0.1%)

What's UP 



Sun Pharma882  22 (+2.6%)
ONGC127  2.8 (+2.2%)
Dr Reddy4,586  84 (+1.8%)

What's Down 



Axis Bank668  11 (-1.6%)
HCL Tech903  14 (-1.5%)
Hero MotoCorp2,801  42 (-1.4%)

 What’s trending?

 Infosys acquires Danish tech co 🤝
INFY (NSE): 1,433  11 (-0.7%)
Infosys has signed an agreement to acquire Denmark-based BASE life science for $111 million. BASE is a leading technology and consulting firm in the life sciences industry in Europe. The acquisition is expected to close in Q2FY23. It will help Infosys augment its life sciences expertise and expand its footprint further in the Nordic region and across Europe. Notably, the life sciences vertical contributes 6.6% to Infosys’ total revenues. 

 Jio, Airtel and Adani to battle for 5G spectrum 📶
BHARTIARTL (NSE): 642  0.6 (-0.09%), IDEA (NSE): 8.6  0.1 (-1.7%)
Reliance Jio and Bharti Airtel are expected to bid for 5G spectrum worth up to 60,000 crore and 50,000 crore, respectively. The sale of the airwaves begins on 26 July. Adani Group is expected to bid for spectrum worth up to 15,000 crore, while Vodafone Idea is likely to bid for spectrum worth up to 6,000 crore. There is expected to be an intense fight for the airwaves, which could push up spectrum prices of some bands by 10%.

 Hindustan Zinc announces dividend 💰
HINDZINC (NSE): 284  12 (+4.6%)
Shares of Hindustan Zinc surged on Thursday after the company announced an interim dividend of ₹21 per share, which is 7.4% of the closing price of ₹284. The Vedanta-promoted company said the dividend payout amounts to ₹8,873 crore, and the record date for the dividend is 21 July. To be eligible, investors need to buy shares at least two trading days before the record date.

 Tata Metaliks reports sharp fall in profits ⛏️
TATAMETALI (NSE): 725  22 (+3.2%)
The maker of pig iron and ductile iron (DI) pipes reported a 99% year-on-year fall in net profit to ₹1.2 crore. This was due to a fall in market prices of pig iron and a significant rise in prices of raw materials like coal and coke. Although revenues rose 10% to ₹669 crore due to higher realisations, volumes of pig iron and DI pipes declined 23% and 8%, respectively.

 Wholesale inflation dips in June 🏭
India's wholesale price index (WPI) fell to 15.18% in June, from 15.88% in May, which was the highest in at least three decades. The overall decline in WPI was due to a decline in manufacturing inflation to 9.19% from 10.11%. Manufacturing constitutes 64.23% of the overall WPI basket. However, wholesale food inflation rose to 12.41% in June, up from 10.89% in May. 

In focus

IT firms disappoint, investors sign out

IT companies have begun to announce their results for the first quarter of FY23. And just like the last quarter, investors have shown their dissatisfaction. IT shares are trading lower, and some have hit fresh 52-week lows. Let's decrypt what's causing investors to hit 'Esc'.

So far three IT firms have announced their results, TCS, HCL Tech and Mindtree. While revenues have risen on a quarter-on-quarter (QoQ) basis, all firms have seen a decline in net profit. This could be a sign of a slowdown in business activity due to rising employee wages and a recession-like situation.

TCS reported a 4.4% drop in net profit to ₹9,519 crore, while HCL Tech’s net profit declined by 8.8% to ₹3,281 crore. Similarly, Mindtree saw  its profit after tax (PAT) fall 0.3% to ₹471 crore.

To make matters worse, the attrition rate has also continued to rise. For TCS, the attrition rate rose to 19.7% for the 12 months ending on 30 June, from 17.4% on 31 March 2022. Meanwhile, HCL Tech’s attrition increased to 23.8% from 21.9%. In the case of Mindtree, the attrition rate jumped from 23.8% to 24.5%. To curb this, companies are taking steps such as raising annual salaries and bonuses, which is having a direct impact on profitability. 

The Nifty IT index has declined over 6% this week, which shows that investors seem to be moving away from the sector. There are fears that a global slowdown could push companies to cut down on IT spending. This is expected to have an adverse impact on the future revenues of IT firms.  

While IT firms seem to be under a dark cloud, investors will look for a silver lining in the results of Infosys and Wipro, which are expected later this month.