The technology stocks are under pressure in trade today. Taking cues from the US market rout overnight, the Nifty IT declined as much as 2.17% to the 36,797.40 level. The IT stocks were among the top Index losers as well with Tech Mahindra and HCL Technologies seeing the maximum damage. In the Nifty IT, LTIMindtree corrected the most, falling 3.75% to the day’s low of Rs 4,652.90. It was followed by Persistent Systems, Infosys, L&T Tech and many others. However, TCS was the only stock to trade in the green.
Here are 5 reasons behind the fall in tech stocks
Apart from the sentimental impact of the US market movement, Kotak Institutional Equities raised some fundamental concerns about the technology sector. They expect the recovery to be significantly weaker than what was anticipated earlier –
US tech stock selloff
The Nasdaq Composite took the hardest hit, sliding 497 points to finish at 18,350, a 2.64% decline. The share price of Nvidia fell the most, dropping 8% in a single trading session. Broadcom and Super Micro Computer also declined.
US Tariff war weighs on sentiment
US President Donald Trump has signed an executive order to raise tariffs on Chinese imports by 10% to 20%, the White House announced on Monday. The action is being defended as a reaction to Beijing’s supposed inability to control the illegal fentanyl trade. This trade war is expected to increase inflation in America. If that happens, then the American companies will cut their discretionary spending, which will negatively impact Indian IT companies.
ALSO READMarkets off early lows, Nifty holds 22,000 but sharp cuts cross Asia; Chinese stocks fall on tariff worries Kotak Institutional Equities on IT Sector: Another year in the slow lane
According to Kotak Institutional Equities, “The 2025 outlook of global companies implies a modest improvement. Indian IT stocks have corrected about 9-21% in the past month, offering some comfort. Investors would ponder the right multiple for the sector, given another year of moderate revenue growth—on first principles, a few stocks offer reasonable upsides. We cut our EPS estimates by 1-5% and Fair Values by 2-21%.”
They see the FY26 growth across most companies ito be modest, though better than FY25. It is seen trending below normalized levels due to
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