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IT stocks were reeling under the impact of TCS's muted guidance for the third quarter with the CNX IT index losing nearly 190 points in the morning trade today.
What probably added to the negative sentiment was the overall weakness that had gripped the market, though the IT stocks had managed to pull back from the earlier lows.
The comments made by TCS CFO Rajesh Gopinathan that the mood was a tad less optimistic now than at the beginning of the year (due to seasonal and cross currency movements, apart from weakness in UK insurance business) had touched off a wave of selling in the stock, which was the biggest loser in the IT index shedding ₹73.80 or 3.01 per cent to slip to ₹2,376.90.
That the stock has shed nearly 20 per cent from its 52-week high of ₹2,839.70 reflects the nervousness of the investors in the counter in recent times.
Another IT company stock belonging to the TATA group, CMC , also witnessed selling pressure, down by ₹51.20 to trade at ₹1,838. Incidentally, both companies are to be merged into a single entity.
Tech Mahindra was another major loser, down by ₹76.85 to trade at ₹2,511.70. HCL Tech shed ₹29.80 to trade at ₹1,482.70. Infosys and Wipro were also down but to a lesser extent. Out of 20 stocks in the CNX IT index, only four - KPIT,JustDial, OFSS and Persistent Systems were in the green.
The Nifty itself was however down marginally with the impact of the sell-off witnessed by the IT stocks being cushioned by the rally witnessed in banking and financial stocks.
HDFC jumped by ₹40.55 to trade at ₹1,110.05 and Kotak Mahindra Bank gained ₹44.65 to ₹1,291.95. IndusInd Bank, PNB, HeroMotocorp, BoB, Grasim, UltraTech Cement, ACC and Coal India were among the gainers.
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