Can bad forecast of a company impact share prices of its peers? Apparently yes, if it is a very large company. Even though you can’t always predict it in advance, something on this line was seen in the stock market today. Let’s look at what happened.
Several Indian IT services stocks, including HCT Tech, Mphasis, Persistent Systems, TCS, Infosys, Wipro tanked up to 5% in early trade hours on Friday (March 22, 2024). Reason: The pessimism that ensued a day after Accenture reduced its FY24 revenue forecast to 1-3% YoY.
Accenture’s IT and consulting services have been hit due to sluggish demand. Delayed decision making and weak discretionary spends amid uncertain economic climate are also to be blamed for Accenture’s lower revenue forecast.
Following Accenture’s announcement on Thursday, American Depository Receipt (ADR) shares of India’s top IT companies like Infosys and Wipro traded low on Wall Street. Accenture’s share price also witnessed a sharp sell-off on the Wall Street. (Know about ADR here)
Here’s how the IT services shares looked at around 11.30 am on March 22
- Nifty IT index was down 1.76% to 35,394.10.
- HCL Tech, Infosys and Wipro were among the top 5 losers on BSE Sensex at 11.30 am. All these shares were down over 2.% to 2.8%.
- TCS share price was down by Rs 51.75 to Rs 3992.30.
- Infosys share price was down by Rs 34.40 to Rs 1520.80.
- Mphasis share price was down by Rs 40.25 to Rs 2398.40.
- HCL Tech share price was down by Rs 39.30 to Rs 1558.
- Persistent Systems share price was down by Rs 165.40 to Rs 8039.10.
- LTIMIndtree share price was down by Rs 104.35 to Rs 5056.40.
- Wipro share price was down by Rs 11.70 to Rs 489
Accenture had earlier forecast a revenue of 2% to 5% for FY24. It has now reduced the forecast to 1% to 3%.
Even as the IT stocks took a beating today, overall markets were in the Green till 12.01 pm. BSE Sensex was up 235 points or 0.27% to 72,831.21 whereas Nifty50 was up 77.70 points or 0.35% to 22,089.65.
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Disclaimer: The above content is for informational purposes only. Please consult a SEBI-registered investment advisor before investing in market-linked instruments.
