Why Are Today’s IT Stocks Declining?\
Indian IT equities fell on December 9 as investors were wary in anticipation of tomorrow’s FOMC policy decision from the US Federal Reserve. By 11:50 am, the Nifty IT index had dropped more than 1.2% to 38,115 due to selling pressure, its second consecutive day of losses.
It is widely anticipated that the Fed would announce a 25-basis-point rate drop during its current meeting on December 9–10. Analysts, however, expect a “hawkish cut,” in which the statement’s tone, revised projections, and Chair Jerome Powell’s comments would indicate a stiffer bar for additional easing.
Analysts’ Opinions
Ajit Mishra, SVP-Research at Religare Broking, stated that investors’ concerns about the potential for a stricter global monetary policy and its potential effects on emerging economies were the main cause of the decline in sentiment.
According to Siddharth Maurya, Founder & MD of Vibhavangal Anukulakara, the Indian IT industry is still dealing with a thinning deal pipeline, continuous foreign investor selling in the face of macroeconomic uncertainty, and decreased discretionary expenditure by international clients.
“AI and automation are changing the sector, but until clients confirm new outsourcing agreements, uncertainty will persist. Dividend rates are still appealing, and values already account for the majority of drawbacks. For long-term contrarian investors who are prepared to endure short-term volatility over the next 12 to 18 months, this might offer a value opportunity,” he continued.
Today’s Top IT Losers
The Nifty IT index was most negatively impacted by Coforge, which fell over 4% to ₹1,873.90.
While Tech Mahindra, LTIMindtree, and Persistent Systems were down about 1%, TCS, HCL Technologies, Wipro, and Infosys all saw declines of more than 1%.
