Why IT Stocks Are Falling?
IT
stocks have been under severe pressure in the last few months. The performance
of IT stocks is inversely proportional to the Rupee. When the Rupee falls, IT
stocks rise upwards. However, this is not the case this time. Many IT stocks
have fallen sharply and have not recovered. IT index sector is at a yearly low
and giant stocks like Infosys, TCS, etc. are also near their 52-week low mark. In
this article, we list some of the reasons for the fall in the IT sector of
India.
Reason for Fall in IT Sector Stocks
· Most of the earnings of the Indian companies are
from their global clients. The global markets have been in a downtrend for a
long time now. The IT companies have faced the most pressure due to the
downfall. Since the global markets are falling, the IT sector is performing
directly proportional to it.
· With the rising interest rates in US and
European countries, the fear of recession is constantly haunting them. This
bearish sentiment has affected the performance of many global companies causing
a fall in revenue, sales and growth prospects. Until the clouds of recession
clear, IT companies are expected to remain under pressure.
· The Russia-Ukraine war has constantly put
global markets under pressure. The rising inflation due to the war is another
cause of worry for the market. The global markets have been under pressure
since the war started. This fall in global markets due to war has also
triggered a fall in the Indian IT markets.
The
above mentioned are some of the main reasons for the downfall in the Indian IT
stocks. The global sentiment shall further determine the direction of the IT
stocks in the coming days. If things get better we may see a good bounce back
in these stocks in the coming days.