Stock market today: Following weak guidance delivered by Accenture, share price of the global IT major crashed over 9 percent at the New York Stock Exchange (NYSE) which resulted in a drop in the ADR (American Depository Receipt) shares of the Indian IT majors Wipro and Infosys.
How much have Accenture shares fallen?
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Accenture share price witnessed a sharp sell-off as it revised full-year revenue growth expectation to 1 per cent to 3 per cent, lower than the early estimates of 3 per cent to 5 per cent. This caused Indian IT majors Wipro, Infosys, Tata Consultancy Services (TCS), and HCL Technologies to trade in red.
The Nifty IT index tanked over 3 percent and the biggest losers in the index were HCL Tech, Mphasis, Persistent Systems which lose over four percent each.
What Accenture said that led to the crash?
Accenture revised its full-year revenue growth projection as it has been grappling with sluggish demand for its IT and consulting services. The results also hint at economic uncertainty in global markets which is majorly affecting consultancies and leading to layoffs or a freeze on hiring.
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What Morgan Stanley said on Accenture?
Morgan Stanley said that Accenture's cut to its guidance for the fiscal year and its cautious commentary raised concerns and there are worries over the pace of the revenue recovery for Indian IT as well.
What other brokerages said?
{{/usCountry}}Morgan Stanley said that Accenture's cut to its guidance for the fiscal year and its cautious commentary raised concerns and there are worries over the pace of the revenue recovery for Indian IT as well.
What other brokerages said?
{{/usCountry}}CLSA said that the sharp downward revision in Accenture's guidance implied that there will be no major pick-up in the second half of FY24 while Nomura retained a cautious stance as discretionary revival was still not seen, it said.
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Nuvama Institutional Equities said that Accenture's guidance cut is a slightly negative for Indian IT services firms, “though not much”, adding, “We believe FY25 Street estimates for Indian IT companies have been adequately rationalised, and have little downgrade risk, from current levels. We maintain our positive stance on the sector and expect a sustainable strong demand environment to drive strong earnings growth over the next three years.”