Tech sector stocks are under pressure today with heavyweights such as Infosys, Tata Consultancy Services, Tech Mahindra, and HCL Technologies are all under pressure. This has pulled the Nifty IT index down around 0.9% in the intraday trading session today. This is the third consecutive session of losses for the sector.
So what is the main reason for the weakness in tech stocks? Let’s take a look at the key factors shaping the market today –
Nifty IT Index sees broad based sell-off
In the intraday trading session, all ten constituents of the Nifty IT index are trading in red. With the Nifty IT Index, Coforge has emerged as the top intraday loser, falling over 3%.
In addition to this, the share price of LTIMindtree, Mphasis, Tech Mahindra, TCS, and HCL Technologies are also down more than 1% each.
Similarly, other IT stocks such as Infosys, Wipro, and Persistent Systems are under pressure.
Rising salary costs spark concerns
One of the key reasons for the fall in the Tech stocks can be Infosys’ recent announcement of higher entry-level salaries for fresh graduates. The IT sector behemoth announced that compensation packages for specialised technology roles could go up to Rs 21 lakh per annum.
Global tech stocks adding pressure
Broader market cues are also weighing on Indian IT shares. Fading hopes of a near-term interest rate cut in the United States and weak performance in the global technology sector have created headwinds.
Since Indian IT companies rely heavily on U.S. clients, any slowdown or uncertainty abroad tends to affect investor sentiment at home.