IT stocks weigh on Nifty as US rate fears hit sentiment

The Sensex swung more than 580 points on Tuesday before settling into a narrow range. The Nifty 50 moved within a 180-point band. By noon, the Sensex was down 67 points at 76,660, the Nifty 18 points lower at 23,928.

Uncertainty over the next round of US-Iran negotiations in Doha kept sentiment cautious, traders said. Technology stocks led the declines. Rate hikes in the US could slow client spending and economic growth in that market, a key revenue source for Indian IT firms, traders said. The Nifty IT index fell. Infosys, Wipro, TCS, and HCL Tech were among the worst performers on the Nifty 50.

Infosys, with an Alpha Score of 57/100, is rated Moderate on AlphaScala's proprietary scale. See INFY stock page. Wipro scores 46/100, a Mixed label. See WIT stock page. The rate sensitivity is the near-term drag on both names, traders said.

Broader markets held up better. The Nifty Midcap 100 rose 0.5%, the Smallcap 100 nearly 1%. Consumer durables and realty advanced about 1%. Chemicals also rose. Media, FMCG, metal, and banking indices traded lower. Maruti, Titan, Bajaj Finance, and Adani Ports were the top Nifty gainers.

Market breadth was positive. Of the 3,219 stocks traded on the NSE, 1,855 advanced, 1,247 declined. 104 stocks hit 52-week highs, 55 touched lows.

The next catalyst for IT stocks will be the April earnings season. Wipro reports on April 16 alongside HDFC Life and ICICI Lombard, a slate that will test whether fundamental demand is holding up. Read more about the April 16 earnings slate. Infosys reports later in the month. The US rate path remains the external risk.