Sensex, Nifty open lower as IT shares drag markets

MUMBAI — Domestic equity markets opened lower on Friday after a recent rally, with IT stocks bearing the brunt of the selling pressure after global software services provider Accenture's guidance cut triggered concerns over the sector's growth outlook.

Sensex opened at 76,852.86, down 0.71 per cent or over 500 points, while Nifty began the session at 23,991.20, declining 0.73 per cent or more than 150 points.

Sector-wise, Nifty IT plunged nearly 6 per cent, while Nifty MidSmall IT & Telecom declined over 2 per cent.

Meanwhile, realty, consumer durables, financial services, metals, auto and FMCG indices were also trading in the red.

On the other hand, defensive sectors attracted buying interest. Nifty Pharma gained 0.47 per cent, while the Healthcare and MidSmall Healthcare indices rose 0.40 per cent and 0.38 per cent, respectively.

The sharp fall in IT shares came after Accenture cut its guidance, triggering a sell-off in Indian IT ADRs and dampening sentiment towards domestic technology stocks.

According to market experts, the near-term outlook remains constructive, supported by improving macroeconomic conditions and a sharp correction in crude oil prices.

They noted that short covering by foreign institutional investors (FIIs) has aided the recovery in banking stocks, with scope for further gains despite intermittent profit booking.

However, guidance cuts by global IT services firm Accenture could weigh on Indian IT stocks following a sell-off in their ADRs, although attractive valuations may trigger buying at lower levels.

Meanwhile, after the United States and Iran signed an interim peace agreement, oil tankers resumed transit through the Strait of Hormuz.

Brent crude, the global oil benchmark, fell more than 1 per cent to $78.83 per barrel. Similarly, US West Texas Intermediate (WTI) crude declined about 1 per cent to $75.78 per barrel.

Global cues remained mixed. Most Asian markets traded lower. Hong Kong's Hang Seng was down nearly 1 per cent, while Japan's Nikkei and South Korea's KOSPI were largely flat.