Downfall of IT Stocks Started

Several interrelated reasons have contributed to the recent decline in India's information technology (IT) stocks: Global Trade Tensions and Tariff Concerns: Because a large amount of IT businesses' revenue comes from the U.S. market, ongoing concerns about U.S. tariffs have had a large impact. For example, on March 12, 2025, Indian equities fell as a result of a slump in IT firms, with Infosys falling 3.5% after Morgan Stanley downgraded it. Economic Slowdown and Inflation: Slow growth and rising inflation have made the overall economic climate difficult. These circumstances have resulted in lower company profits, particularly in the cycle-sensitive IT sector. Analysts point out that the ongoing economic difficulties may keep corporate earnings growth muted. Withdrawals by Foreign Investors: Foreign investors are pulling money out of emerging nations like India due to the stronger U.S. dollar and the alluring returns in established markets. This change has negatively impacted industries like IT and increased market volatility. According to the Financial Times, foreign investors looking for higher earnings abroad have been driving the stock market's decline since October 2024.

Regulatory and Security Issues: Events such as the Angel One security incident, in which some resources from Amazon Web Services were compromised, have sparked worries about cybersecurity in the financial industry. Even if customer assets were said to be safe, these kinds of intrusions can make investors less confident. Angel One's stock dropped as much as 4.7% after the hack.