IT Stocks Crash: What happened today that caused IT stocks to crash? IT companies among F&O's top 10 losers

News Topical, Digital Desk : IT stocks witnessed heavy selling on Thursday, leading the Nifty IT index to fall by more than 4%. Investors took heavy profits in IT stocks due to weak global cues and pressure on the tech sector.

All of the top 10 losers in the derivatives segment, or F&O, were from the IT sector. This clearly indicates widespread selling across the sector. Furthermore, the top five losers on the Nifty also included only IT companies, which indicates the pressure on tech stocks in the market.

Why did it fall so drastically?

• The impact was visible due to weak signals from global markets and increasing uncertainty regarding global IT demand.
• News of rapid advances in enterprise AI tools has raised concerns that artificial intelligence could threaten traditional software and IT services businesses.
• Despite strong US economic data, expectations of an early interest rate cut from the Federal Reserve weakened, putting pressure on the tech sector.
• Investors are now shifting towards stocks with 'AI immunity' (such as energy, industrial).

Expert Opinion: Ed Yardeni (President of Yardeni Research) said that IT companies are now competing with each other like a 'Game of Thrones'. Heavy spending on AI has increased uncertainty about returns for software and large tech companies. Mitesh Thakkar (Research Head) advised investors to remain cautious in the IT sector for now. He recommended buying Eicher Motors, ICICI Bank, and PI Industries, while recommending selling IDFC First Bank. 

• The Nifty IT index fell by more than 4% in early trading.
• Most of the top 5 losers of Nifty were IT companies.
• There was heavy selling and short positions were created in IT stocks in F&O, which further accelerated the decline.

Experts advise investors
that this decline may be temporary, but AI-related risks and uncertainty about global demand should be monitored. Long-term investors may see opportunities to buy on dips in IT companies with strong fundamentals, but caution should be exercised in the short term.

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