The Nifty IT index slumped over 6 per cent after Accenture lowered its FY26 growth forecast and reported weaker bookings, triggering a broad-based sell-off in Indian technology stocks led by Infosys and TCS.
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Indian technology stocks witnessed a sharp sell-off on Friday after global consulting giant Accenture trimmed its revenue growth forecast and flagged a challenging demand environment, fuelling fresh worries about the pace of recovery in global IT spending.
The weakness swept across the sector, dragging the Nifty IT index down more than 6 per cent in early trade and making it the worst-performing sectoral gauge on Dalal Street. The decline came amid concerns that softer client spending and weaker deal activity could weigh on earnings prospects for Indian IT exporters.
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The Nifty IT index fell as much as 1,831 points, or 6.43 per cent, to an intraday low of 26,634.50. Later in the session, the index remained under pressure and traded about 5 per cent lower at 26,956.90.
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Infosys emerged as the biggest laggard among frontline IT stocks, falling 7.4 per cent. Tata Consultancy Services (TCS) lost 5.6 per cent, while Mphasis declined 5.3 per cent.
Other major technology counters also traded in the red. Persistent Systems slipped nearly 5 per cent. LTIMindtree dropped more than 4 per cent. Tech Mahindra and HCLTech fell around 4.5 per cent each. Coforge lost close to 4 per cent, while Wipro declined more than 3 per cent.
The selling followed a sharp overnight fall in Accenture shares after the company lowered its FY26 revenue growth guidance and reported weaker new bookings compared to the corresponding period last year.
Accenture reported third-quarter revenue of $18.7 billion but cautioned about continued uncertainty in customer spending. The company also cited revenue headwinds linked to developments in West Asia.
The negative sentiment spilled over to Indian IT companies listed in the US. Infosys ADRs fell around 10 per cent overnight, while Wipro ADRs declined more than 3 per cent.
Market participants said the guidance cut has revived concerns about demand visibility for technology services companies that derive a significant share of revenue from overseas markets.
The weakness was not limited to large-cap IT firms. Technology stocks on the BSE Midcap index also faced heavy selling.
KPIT Technologies, Tata Elxsi, Hexaware Technologies and LT Technology Services figured among the major losers during morning trade.
According to market experts, earnings downgrades remain a key risk for the sector if demand conditions fail to improve in the coming quarters.
They, however, noted that buying interest could emerge at lower levels as valuations become more attractive following the sharp correction.
Analysts also pointed out that despite the recent decline, leading Indian IT companies continue to trade at valuation multiples higher than Accenture, which is currently valued at around nine times one-year forward consensus earnings.
Friday’s decline added to the pressure already facing the technology sector after recent signals from the US Federal Reserve suggested interest rates could stay higher for longer, hurting sentiment towards global technology stocks.
The Nifty IT index has now fallen nearly 30 per cent from the 38,600 level seen over the past one year.
The weakness in technology counters also weighed on the broader market. During morning trade, the Sensex dropped more than 700 points while the Nifty slipped below the 24,000 mark.
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