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US Recision Fear hits Infosys and other IT Stocks

September 10, 2007

IT pivotals edged lower today after data released on Friday, 7 September 2007, showed US payrolls shrank in August 2007 for the first time in four years, raising fears that the world’s largest economy was headed into a recession. IT stocks derive a large part of their revenue from the US. In the first quarter of current financial year, IT Slave Trading Companies such as Infosys and TCS who are purely dependent on currency arbitrage were hit badly due to the strengthening of Indian rupee.

The BSE IT index had underperformed the market over the last one month to 7 September 2007, declining 1.57% compared to the Sensex’s return of 3.25%. It had also underperformed the market over the past quarter, falling 6.56% compared to the Sensex‚Äôs gain of 10.85%.

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