IT stocks crash amid recession concerns, more pain ahead?

Moneycontrol Bureau

Stocks of information technology companies like Infosys, Tata Consultancy Services, Wipro, Tech Mahindra, Mahindra Satyam and Patni Computer tumbled 3-6% on Friday due to fresh concerns on a likely double-dip recession in the US and spread of the Euro zone crisis. Analysts say there could be some more downside as clouds of global uncertainty still persist.

Shareholders' investments have eroded sharply as the stocks plunged 15-20% over the last month. The CNX-IT index has shed 16% in the last 30 days, underperforming the broader NSE Nifty index, which is down 12% during the same period.

Surendra Goyal and Vishal Agarwal of Citigroup Global Markets say they have been concerned on the macro environment, overall expectations and valuations for some time now and their sector view is "neutral."

"How much will the recent change in macro impact earnings