The Nifty 50 fell 0.11% at 17,793, as of 10:14 a.m. IST, while the S&P BSE Sensex lost 0.13% to 60,312.44. Six of the 13 major sectoral indexes declined.
The high-weightage IT lost more than 1.8%, with nine of the 10 firms in the index logging losses. TCS, Tech Mahindra Ltd , HCL Tech Ltd and Infosys Ltd fell more than 1.5% each, and were among the top losers in Nifty 50 index.
The fall in IT stocks comes after TCS flagged concerns of deferred spending and near-term uncertainty in its banking, financial services and insurance (BFSI) segment. TCS reported nearly 15% year-on-year growth in net profit in the March quarter, topping estimates.
Analysts said unexpected weakness in the BFSI segment in the U.S. weighed on TCS' results. "Outlook is clouded by client caution driving cuts to discretionary tech spends," according to JP Morgan.
Infosys will report its Q4 earnings on Thursday. "Slowdown is a reality, expect subdued demand outlook on near-term tech spending," three analysts at Kotak Institutional Equities wrote in a note. "Recent events in U.S. regional banks have induced greater caution (about) spending." The U.S. Federal Reserve's projection of a mild recession later this year added to concerns about clients' spending cuts in the IT sector and weighed on sentiment. Among other stocks, AU Small Finance Bank jumped 13% on the Reserve Bank of India's approval for the reappointment of its managing director and CEO.
The Nifty 50 is on course to rise for the third week in a row, adding more than 1% so far this week. Indian markets will be closed on Friday for a local holiday.
($1 = 82.0400 Indian rupees) (Reporting by Bharath Rajeswaran in Bengaluru; Editing by Nivedita Bhattacharjee and Janane Venkatraman)
