BSE IT and teck indices plunged more than 4 per cent each, in line with the fall seen in Nasdaq.
Technology stocks have emerged as the worst performers in 2022 so much so that a quick analysis of BSE100 losers shows that the top five names belong to the IT pack. These stocks are down up to 45 per cent on a year-to-date basis, having wiped out close to Rs 3.5 lakh crore from investors’ pockets.
AK Prabhakar, Head of Research,
Capital, said IT is facing the rub-off effect as US central bank wants to control rising prices and overgrowth.
On Monday, bluechip IT behemoth
plunged more than 7 per cent to 875.65, whereas tanked over 6 per cent to Rs 1017.35.
Among other IT giants,
dropped 5 per cent, whereas and (TCS) shed more than 4 per cent each during the session.
Second-rung IT counters such as , , LTI, , , LTTS, , and dropped in the range of 3 to 7 per cent each.
Despite a steep depreciation in the Indian currency, software exporters have remained out of favour. The majority of the analysts rule out expectations of a sharp recovery anytime soon.
Ajit Mishra, VP – Research,
Broking said the outlook for the sector remains challenging in the near term but the fall in Indian IT stocks is not as steep as global peers.
Mishra suggested investors to select IT stocks with a medium-term outlook. He has picked Infosys and TCS from the largecaps, whereas Mindtree, LTTS, Cyient and Persistent Systems are his picks from the midcap pack.
Prabhakar from IDBI Capital is neutral on the IT pack as he believes that the technology budget might get trimmed but due to its increased penetration in day-to-day life, a smooth operation will not be possible.
He also picked Infosys and TCS from the largecap peers, whereas he suggested picking stake in Zensar Technologies on corrections.
Another brokerage firm
has maintained its underweight stance on the sector and prefers stocks that have the potential to continue gaining market share even in a slowdown.
Its top picks are TCS, Infosys, MindTree, Persistent Systems and Coforge.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)