Shares of domestic IT companies extended their losses on Monday after Britain decided to leave the European Union in a referendum. The Nifty IT index fell as much as 1.5 per cent intraday.
Stocks of IT majors such as Tata Consultancy Services, Infosys, Wipro were trading down by 2.91 per cent, 1.39 per cent and 0.66 per cent, respectively, in the morning trade (at 11.23 am).
HCL Technologies, Mindtree, Tech Mahindra shares were also down by 0.62 per cent, 0.50 per cent and 0.29 per cent, respectively.
Read more: LIVE STOCK MARKET COVERAGE
In a historic development, the UK has voted to leave the European Union after 43 years as the ‘Brexit’ camp on Friday took a seemingly unassailable lead over the ‘Remain’ camp in a down-to-wire referendum with far reaching implications for the world.
According to reports, domestic software companies generates between 6-18 per cent of their revenues from the UK. There are fears that the UK operations of several Indian companies might take a hit due to immigration and other restrictions that might come in because of Brexit.
The Nifty IT index plunged 2.47 per cent to 11203.15 on Friday.
According to Kotak Institutional Equities, IT companies have meaningful exposure to EU and UK. The immediate impact could be through the currency route (weaker Euro and GBP versus the rupee although some of it could be offset by stronger dollar against the rupee) and the medium-term impact could be through lower revenues as companies, particularly banks, in EU and UK review their growth and investment strategies.
IT companies have significant exposure to Europe