IT Stocks Fall Yet Again. Here’s What You Need To Know

The IT stocks have fallen sharply this year, and the sharp fall continues on the fear of a possible US recession. Most of the sectors in the Indian market have recovered rapidly from their sharp downfall at the start of this year; however, the IT sectors have significantly underperformed this year and are showing little signs of recovery.

In recent trading sessions, the IT sector has taken a big hit as the IT sector was down almost 3 percent on 14 September 2022, and it is down by 1.3 percent today, on 15 September 2022.
The main reasons for the sharp fall are the Inflation rates and the news of a possible recession in the US.

The IT stocks are falling in the recent trades because just recently, on Tuesday, the inflation rate in the US got out, and concerns related to the recession are increasing as the inflation rates are not coming down. The Central bank of the US is increasing the interest rates at the fastest rates in over four decades to control Inflation.

Recently, Goldman Sachs has downgraded two of the leading Indian IT stocks, Infosys, and Tata Consultancy Services (TCS), to 'sell' but has upgraded Wipro to buy after looking at the order book and valuation of the company.

The fear of recession in the US has hit Indian IT stocks significantly as the US accounts for more than 25 to 65% of the revenue for the IT companies, and the slowdown in the economy of the US will eventually slow down the revenue and sales growth of Indian IT companies.