Shares of electronics manufacturing firms--Dixon Technologies, Kaynes Technology and Amber Enterprises suffered sharp losses on January 8. Among these, Dixon Tech emerged as the worst hit, registering an 8 percent slump, the biggest in 10 weeks. Aside from that, shares of Kaynes Technology and Amber Enterprises fell around 4 percent each.
The selloff in electronics manufacturing service (EMS) providers follows a nearly 2 percent drop in Wall Street's tech-heavy Nasdaq Composite index, driven by sharp declines in Big Tech stocks. The losses were sparked by concerns over stubborn inflation, casting doubts about the potential for interest rate cuts by the Federal Reserve this year.
Indian EMS stocks often track the Nasdaq Composite due to their exposure to the technology sector, which has a significant presence in both markets. Many of these companies are involved in manufacturing electronics and components for global tech giants, whose stock performance heavily influences the Nasdaq.
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The weak cues from the Nasdaq Composite also outweighed buzz over a production-linked incentive (PLI) scheme being lined up for electronics components with an outlay of Rs 25,000 crore in the upcoming Union Budget.
Reports suggest that while the industry has been pushing for a Rs 40,000 crore allocation, the Ministry of Electronics and Information Technology (MeitY) may consider increasing the expected Rs 25,000 crore outlay depending on the scheme's response.
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