The Indian IT sector witnessed a sharp sell-off on Friday, with the Nifty IT index plunging 3.65 per cent as investors reacted negatively to weaker guidance from global technology consulting giant Accenture. The decline led to a massive erosion of nearly ₹80,900 crore in the combined market capitalisation of nine major Nifty IT companies. Infosys emerged as the biggest loser, falling 6.5 per cent with an estimated erosion of around ₹30,947 crore in market value. Tata Consultancy Services (TCS), another heavyweight, declined 3.06 per cent, wiping out an estimated ₹28,465 crore from its market capitalisation. The sharp decline in these two companies alone accounted for nearly three-fourths of the total market value wiped out from the selected Nifty IT stocks.
US President Donald Trump and Iranian President Masoud Pezeshkian virtually signed a 14-point memorandum of understanding (MoU) on Thursday aimed at ending hostilities between the two countries, reopening the Strait of Hormuz, and initiating a 60-day process to negotiate a broader agreement on sanctions and Iran's nuclear programme. According to foreign media reports, this diplomatic thaw is raising hopes of an economic rebound in the Middle East, with several Indian companies having significant exposure to the region expected to benefit from improved business conditions.
In the US, Accenture reported weak earnings and trimmed its full-year revenue guidance to 3-4%, down from its earlier estimate of 3-5%. The stock plunged 18%, marking its steepest single-day decline on record, creating widespread weakness across the IT sector. The weakness spilled over to peers, with Cognizant falling 11% and Capgemini declining nearly 9%. Consequently, Infosys ADRs dropped nearly 10%, while Wipro ADRs fell 3.6%, reflecting the contagion effect across global IT companies.
Among the key beneficiaries, engineering and construction giant Larsen & Toubro (L&T) stands out with 36 per cent of its order book, valued at approximately ₹7.3 lakh crore, linked to the Middle East. As reported by Zee Business Research, improved project execution and fresh order inflows could provide a significant boost to the company. The company's substantial regional exposure positions it well to capitalize on the expected economic recovery in Gulf markets.
Market participants will closely monitor developments in US-Iran relations, as a sustained improvement in geopolitical stability could create fresh growth opportunities for Indian companies across sectors including consumer goods, automobiles, engineering, infrastructure and exports. However, the IT sector faces near-term challenges as Accenture's decision to trim its full-year revenue outlook has created sector-wide concerns. From a technical perspective, the Nifty IT index remains under pressure, with the index continuing to remain in a firm downtrend across timeframes. The immediate support zone is identified at 26,180 levels, which corresponds to the identical lows recorded during calendar years 2022 and 2023. Meanwhile, the broader Nifty extended its rally for the fifth consecutive session, gaining 82 points to close at 24,168, with the Indian rupee appreciating 20 paise to 94.33, its highest level since May 8, 2026.
