13th March 2025: Indian benchmark indices saw a dip on Wednesday, with IT stocks entering a bear market amid concerns about the U.S. economy. The Nifty 50 closed 0.12% lower at 22,470.5, while the Sensex dropped 0.1%, ending at 74,029.76. The indices fluctuated throughout the day, swinging between a 0.7% decline and a 0.4% gain.
Despite the downturn, analysts pointed out that the Indian market has performed better than global equities over the past week, aided by moderating valuations after the recent sharp decline. Motilal Oswal Financial Services suggested that the Indian market could be nearing the end of its correction phase unless an unforeseen risk emerges.
The IT sector, which was the hardest hit, fell by around 3%, reaching an eight-month low. The sector is now officially in a bear market, with a drop of over 20% from its peak in December. Infosys and Wipro saw significant losses, with shares falling 4.3% and 3.3%, respectively, making them among the worst performers in the Nifty 50 index.
The weakness in IT stocks is largely attributed to concerns about a potential recession in the U.S., which could negatively impact consumer spending. Given that a large portion of revenue for Indian IT companies comes from the U.S., this poses a significant risk to the sector. In response, both Morgan Stanley and Motilal Oswal revised their ratings for Infosys and Wipro, with Morgan Stanley downgrading Infosys to “equal-weight” and Motilal Oswal adjusting their ratings to “neutral” for Infosys and “sell” for Wipro.
