Foreign investors are exiting Indian Information Technology (IT) stocks over the fear that the recession cloud in developed economies will spoil the digital transformation party.
The IT sector led the foreign fund exits in the first half of the current fiscal. FPIs pulled out a net investment of Rs.44,385 crore from the IT sector between April and September 2022. It was followed by the financial service sector (Rs.26,382 crore); oil, gas, and consumables fuels(Rs.16,853 crore).
The outflow from the IT services in the first six months of the current fiscal year is nearly 90% of what foreign investors pulled out in FY22.
The Indian IT index began to correct over the last couple of months. The Nifty IT Index fell 25.71% between March and September 2022 against the 2.12% fall of the Nifty 50 Index.