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IT Stocks Fall Over 5% Today; What Should Investors Do Now?


Last Updated: June 06, 2023, 15:07 IST

After a brief rally, Indian IT stocks declined on Tuesday. The shares fell up to 5% with Persistent Systems (-5.13%), Mphasis (-3.94%), and Coforge (-3.60%) being the top losers. Index heavyweights Tata Consultancy Services (TCS), Infosys, Wipro, and HCL Technologies fell more than 1%.

The Nifty IT index was down by two per cent. The index opened at 29,003.50 against the previous close of 29,238.75 but soon fell to the level of 28,662.65.

The index, after a healthy gain of about six per cent last month, has been witnessing profit booking in June so far as investors fear that even if the Fed takes a pause in the June policy meeting, rates may be hiked later as the US jobs market remains tight and inflation remains elevated. This will hit the growth prospects of the US which is a crucial market for Indian IT companies.

Moreover, a fresh wave of the selloff could be attributed to the updates by leading American IT company EPAM Systems which announced the reduction of its second quarter and full year 2023 financial outlook. As per a Yahoo Finance report, EPAM Systems, Inc., leading digital transformation services and product engineering company, today announced it is reducing its second quarter and full year 2023 financial outlook due to further deterioration in the near-term demand environment.

IT stocks have underperformed the Nifty50 by a margin over a 12-month period. The Nifty IT index has declined 4.6% during this period as against a 12% (+1,974 points) return given by the 50-stock index, according to Trendlyne data.



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