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IT Stocks: IT stocks in worst condition since 2008, further pressure due to these reasons

IT Stocks: The stocks of IT companies are under heavy pressure this year. Investors fear that growth will remain sluggish for a long time. Due to this, there is a possibility of the biggest decline in a decade. Nifty IT Index has slipped more than 24 percent in this year 2022. Now it seems to be in worst condition since 2008. In the year 2008, due to the global recession, it was broken by about 55 percent. The rally in the IT index for the last five years came to an end this year. It has given an annual return of 31 per cent in the last five years. Talking about individual stocks, Wipro, Tech Mahindra, LTIMindTree, HCL Tech, Infosys and Tata Consultancy Services (TCS) this year 12-45 The percentages are broken. The biggest decline was in Wipro and it slipped 45 per cent.

Winter season to be long for IT stocks

According to brokerage firm JM Financial Services, there is a possibility of economic slowdown in developed countries. 90 percent of IT services are exported to these countries and now the risk is visible on it. The US Federal Reserve has adopted the tightest monetary policy in the last four decades, which could lead to a recession in the US economy. It can also have a bad effect on Indian IT companies.

There is a deep fear of recession in European countries as well. According to JM Financial, demand may remain sluggish in the European zone, the second largest market for Indian IT companies. The brokerage firm compared the current situation in Europe with the Eurozone sovereign debt crisis of 2012. IT stocks have fallen heavily from last year's highs but analysts at Credit Suisse Securities India expect further downside. Last week, Credit Suisse expressed apprehension that if there is weakness on the macro situation in the US, IT stocks may see a sharp decline here too.

50% withdrawal only from IT stocks

This year, out of the total withdrawals made by foreign investors from the Indian market, 50 per cent is from the IT sector. Fearing a recession, foreign investors have pulled out more than $900 million from the Indian IT sector this year. Now JM Financial and Credit Suisse have expressed apprehension that the cold weather for Indian IT companies and their stocks may last longer.


Disclaimer: The advice or views expressed here are the personal views of the expert/brokerage firm. The website or management is not responsible for this. Stockpro advises users to always take certified expert advice before making any investment decision.

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