Sensex, Nifty tumble in early trade dragged down by IT counters; Infosys falls nearly 12%

Equity benchmark indices tumbled in early trade on Monday after nine days of rally, dragged down by index major Infosys, which fell nearly 12% after lower-than-expected revenue growth guidance for FY24.

Weak trends in other IT counters also pulled the benchmark lower.

The 30-share BSE Sensex tanked 677.86 points to 59,753.14 in early trade. The broader NSE Nifty fell 200 points to 17,628.

Among the Sensex firms, Infosys emerged as the biggest laggard, falling nearly 12% after the company reported lower-than-expected growth in the fourth quarter net profit and gave a weak 4-7% revenue growth guidance for FY24 amid the tightening of IT budgets by clients following a turmoil in the US banking sector.

Tech Mahindra, HCL Technologies, Tata Consultancy Services, Wipro, HDFC, and HDFC Bank were the other laggards.

Power Grid, IndusInd Bank, UltraTech Cement, Nestle, Titan, and Hindustan Unilever were among the winners.

"The worse-than-expected Q4 results from Infosys with only 4-7% revenue growth for FY24 will drag down IT stocks impacting the Nifty," said VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services.

In Asian markets, Seoul and Japan were trading lower, while Shanghai and Hong Kong quoted in the green.

The US markets had ended lower on Friday.

"Denting sentiments are TCS and Infosys' Q4 results, which missed street estimates. Investors would also focus on March inflation based on the Wholesale Price Index (WPI)," Prashanth Tapse, Senior VP (Research), Mehta Equities Ltd, said.

Equity markets were closed on Friday on account of Ambedkar Jayanti.

The Sensex had gone up marginally by 38.23 points or 0.06 % to settle at 60,431 on Thursday. The Nifty climbed 15.60 points or 0.09 % to finish at 17,828.

Meanwhile, global oil benchmark Brent crude climbed 0.07 % to $86.37 per barrel.

Foreign Portfolio Investors (FPIs) bought equities worth Rs 221.85 crore on Thursday, according to exchange data.