Coforge, TCS, and Infosys are top losers on a bad day for IT stocks

Indian IT stocks are one of the top contributors in dragging the Nifty  50 down from a record high to 20,800 and the Sensex losing over 300 points on Wednesday (December 13).

Three out of five top Nifty 50 losers, TCS, Infosys and LTIMindtree, are technology stocks. While there's no clear news trigger for the fall in these stocks, some market participants attribute the nervousness to the impending outcome of the interest rate decision from the US Federal Reserve.

All 10 Nifty IT stocks are trading in the red. Coforge (-2.39%), TCS (-2.19%) and Infosys (-1.90%).

Since a bulk of the revenue for Indian IT companies come from software exports, the value of the US dollar is a crucial component in their earnings. And, the decision of the American central bank has a bearing on the value of the US dollar.

Simply put, when the value of US dollar increases, the earnings of Indian exporters rise and similarly, a fall in the value of the US currency reduces the earnings in rupee terms. It is important to note that this is not the only variant in determining the earnings prospect for any company.

Among mid-cap companies Persistent Systems is down nearly 1%, shares of Coforge are down 1.87%, Mphasis is down 1.36% and LTI Mindtree is down 1.5%. 63Moons is the top S&P BSE IT index loser, down 5%. Sonata Software, Genesys, Accelya, and Map My India are the other top losers.

The Nifty IT index is down 1.67% or 560.35 points at this hour, down for the second day in a row.  The index has fallen for the fifth session in the last 10 trading days.