Tech Stocks Continue to Decline: Investing in Technology Funds Amid Market Turbulence
Nifty IT Index Falls Over 4 Percent, Raises Questions About Investing
The Nifty IT index extended its losses, falling over 4 percent at around 12:30 pm on Friday, sharply underperforming the broader market. This decline is part of a larger trend, with IT stocks down nearly 19 percent so far this year and over the past three months.
Heavyweights like Infosys, HCL Tech, TCS, Tech Mahindra, and Wipro declined between about 1.5 percent and over 4 percent, while midcap IT stocks such as Coforge and Mphasis also dropped around 3 percent. This widespread selling across the sector has left many investors wondering if this is a good time to step in or better to wait.
The recent fall is not just a one-day move. Over the past three months, IT stocks have seen significant declines, even as longer-term returns remain positive at around 5-8 percent over three to five years.
IT Stock Performance Over the Past Three Months
| Company | 1-Month Return | 3-Month Return | 1-Year Return |
|---|---|---|---|
| Infosys | -2.5% | -14.1% | 6.3% |
| HCL Tech | -3.4% | -12.1% | 10.2% |
| TCS | -1.8% | -10.4% | 8.5% |
| Tech Mahindra | -4.4% | -18.5% | 5.1% |
| Wipro | -2.2% | -15.6% | 4.9% |
| Coforge | -3.5% | -16.2% | 12.8% |
| Mphasis | -3.1% | -14.8% | 11.4% |
Industry experts say the pressure on IT stocks has been building over the past week. Along with muted earnings, companies have given cautious growth guidance, pointing to slower client spending, delayed decision-making, and weaker deal momentum.
Experts are divided on timing, but broadly agree on a cautious, phased approach. Some suggest investors to avoid lump-sum bets and instead take a staggered route through Systematic Investment Plans (SIPs) or Systematic Transfer Plans (STPs) into quality tech funds.
Read also: Treasury Yields Experience Largest Increase in Two Weeks Following Release of Labor Market Data
The broader takeaway is that while the correction has improved entry points, uncertainty around growth and global cues means patience is key. Rather than trying to time the exact bottom, gradually building exposure may be a more balanced approach.
Investor Takeaway
Investors should be cautious and consider waiting before stepping into the IT sector.
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