Moody’s US downgrade, a fresh jolt for IT stocks after stellar 30% rally – buy or avoid?
[hfe_template id='11223']
[ad_1]
US’ credit ratings downgrade by Moody’s could create a short-term setback for the IT stocks, which have enjoyed a formidable run on the D-Street over the past month, rising by up to 30%. A glimpse of which was seen on Monday where tech counters fell sharply. “Moody’s downgrade comes following Fitch’s earlier action in August 2023, and it has created short-term challenges for Indian IT stocks, which depend heavily on the US for 60–70% of their revenue. The market reacted swiftly, reflecting investor concerns over a potential slowdown in US client spending,” Om Ghawalkar, Market Analyst at Share. Market said. Moody's Friday cut by one notch to Aa1 follows a change in 2023 in the agency's outlook on the sovereign due to wider fiscal deficits and higher interest payments. Earlier, Fitch was the second major rating agency to strip the United States of its top triple-A rating, after Standard & Poor's did so after the 2011 debt c...