IT shares came under selling pressure on Thursday after a sharp two-day rise, with investors booking profits ahead of key US inflation data.
After gaining up to 5.5 percent in the past two sessions on hopes of a US Federal Reserve rate cut, the Nifty IT index slipped nearly 1 percent, making it one of the top sectoral losers. Nine out of 10 constituents traded in the red.
Persistent Systems led the fall, declining up to 2 percent to Rs 5,326 apiece on the NSE.
Infosys dropped 1.38 percent as investors tracked for updates from the board of IT major which convenes today to consider a proposal for share buyback, which will be the first one in three years, and fifth in last eight years.
Decision on Infosys buyback closely watched as board considers first proposal in three years
LTIMindtree shed 1.66 percent. Wipro, HCL Technologies, Tech Mahindra and Mphasis also traded lower, slipping up to 1.3 percent. Tata Consultancy Services was the sole gainer, edging up 0.14 percent.
The recent rally in IT shares was fuelled by expectations of a Fed rate cut and easing trade concerns after US President Donald Trump said Washington and New Delhi would resume talks to resolve trade differences. Indian IT firms derive a significant share of their revenue from the US market.
However, sentiment turned cautious as investors awaited US consumer price index (CPI) data, due later in the day, following weaker-than-expected producer price numbers.
A Reuters poll projected CPI to rise 0.3 percent month-on-month in August, after a 0.2 percent increase in July. On a year-on-year basis, CPI was seen at 2.9 percent versus 2.7 percent in July.
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