Further correction in IT stocks not ruled out amid multiple headwinds

The IT industry is seen as a hedge against rupee depreciation

Share prices across the information technology (IT) sector have seen sharp corrections. While the Nifty50 has risen 1 per cent in the last month, the IT Index has dropped 5.9 per cent. Many individual shares have done worse. On Wednesday, both the S&P BSE IT and Nifty IT indices were the top sectoral losers, down by over 3 per cent each.

The reason for the recent selloff is the strong association between the IT sector and North America. As US inflation has spiked and the US Federal Reserve (Fed) turned hawkish, it’s assumed the IT sector’s revenues will be hit