Infosys, the Indian software giant, experienced a steep decline in its stock price, dropping to a 52-week low of Rs 1,219 as investors grew concerned about the future of technology companies. The firm had guided for a lowball revenue growth of 4-7% in 2023-24, and its market capitalization worth Rs 73,000 crore was wiped out when the stock fell close to 15% in the morning. Late in the afternoon, it recovered slightly but was still down by 9% from Friday’s close, closing at Rs 1,258.10.

Investors panicked about the future of technology giants at a time when well-known commentators such as Nouriel Roubini and Hank Paulson have been raising the specter of a recession in the US later this year. Concerns about a potential slide into recession are hurting technology companies, which typically earn about 40% of their revenues from the US. A recession is expected to badly crimp discretionary tech spending in the US, impacting companies such as Infosys, TCS, and HCL Tech.

Several brokerages downgraded Infosys after its fourth-quarter results disappointed the Street, and cut its target price. JP Morgan lowered the stock to “underweight” and cut its target price to Rs 1,200 from Rs 1,500 a share. CLSA cut its target price to Rs 1,550 from Rs 1,800, Citi kept its target price to Rs 1,400 from Rs 1,675 a share, Nomura Research target price was at Rs 1,290 from Rs 1,660, while BoFa cut its target price to Rs 1,390.

The HDFC Bank, another heavyweight in the Sensex, has also come under pressure after a reasonably strong set of Q4 results. Concerns are spilling over ahead of its merger with mortgage financier HDFC as it waits for requisite regulatory and court approvals. HDFC Bank Ltd is hoping to complete its merger with Housing Development Finance Corporation Ltd. by July.

Meanwhile, shares of cigarette-to-hotel major ITC crossed the Rs 400-level and hit a 52-week high of Rs 400.20. The stock rose 1.2% in Monday’s trade on the BSE. The index heavyweight has been the top performer, rising over 48% in the last one year. It has surged over 20% year-to-date.

Overall, the market reacted violently as Infosys experienced a crash, and intense selling in Infosys and the HDFC twins pulled the benchmarks down. The 30-share BSE Sensex tanked 520.25 points or 0.86% to settle at 59910.75. During the day, it plunged 988.53 points or 1.63% to 59442.47. The broader NSE Nifty fell 121.15 points or 0.68% to finish at 17706.85.

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