Infosys, HCLTech Plunge 2% as CLSA Flags Weak Q3 Outlook, Advises Trimming IT Positions

• Infosys and HCLTech shares dropped over 2% on January 5 after global brokerage CLSA issued a cautious Q3 outlook.
• CLSA advised investors to trim positions in IT stocks, anticipating subdued Q3 FY26 earnings.
• The Nifty IT index declined over 1.6%, as CLSA noted valuations nearing fair value, limiting near-term upside.
• CLSA downgraded HCLTech to 'Hold' and lowered Tech Mahindra's rating, removing it from its Focus List due to revenue growth concerns.
• Most major IT stocks, including Wipro, TCS, and Persistent Systems, also saw declines, though LTIMindtree traded marginally higher.

Why It Matters: CLSA's cautious Q3 outlook and rating downgrades led to a significant sell-off in Indian IT stocks.