The IT index fell 1.5 percent after subdued demand and a cautious medium-term earnings outlook for the sector. Management commentary from IT companies ahead of the September-quarter results silent period has remained cautious, with weak macroeconomic conditions, geopolitical uncertainties, elevated interest rates and inflation posing downside risks to earnings. Most constituents of the IT index declined, with Oracle Financial Services Software being the sole exception. Its shares gained more than 1 percent after falling over 8 percent on Monday. The company had clarified after market hours on Monday that it was not aware of any developments related to $18 billion of debt associated with a data centre leased by its parent company in New Mexico. Muted discretionary spending amid challenging macroeconomic conditions could result in further earnings-per-share downside, particularly for Infosys and Wipro. TCS also maintained a cautious outlook, while HCLTech offered comparatively more resilient demand commentary. Analyst expects order books and employee headcount across the sector to remain broadly stable, suggesting that concerns over the impact of artificial intelligence rollouts on deal renewals and IT employment may not translate into extreme negative repercussions in the near term. The banking, financial services and insurance segment, meanwhile, continues to see relatively resilient demand, CLSA noted.

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