Can the IT Industry Weather Falling Stock Markets?

The IT industry has been strong globally, leading the recovery over thepast couple years in many markets.  With yesterday’s global stock markets plunge to their lowest levels since the last recession, can IT companies continue their growth or will the headway they’ve been making be lost?

In the last two days global markets have slid significantly creating worry that the world will see another recession just as the economy has been bouncing back.  The IT industry has been an industry leading the global economy out of this past recession.  Because they’ve been strong companies in the sector will likely weather this latest downturn better than banks and others, but if this slide continues then it looks like no one will be insulated against the effects of a second recession within less than 5 years.

Friday, France’s CAC-40, London’s FTSE 100, Germany’s DAX, U.S.’s NYSE, Canada’s TSE, Japan’s Nikkei and Hong Kong’s Hang Seng all dropped considerably causing others to panic and get rid of stock quick.  Of course this is creating additional doubt in the markets pushing further the downward spiral.  “It’s a general fear that is clouding the markets at the moment,” said Tom Kaan of Louis Capital Markets in Hong Kong.  Much of the fear has been driven from the U.S.’s close call on not reaching a deal not to default on their debts, and Europe’s struggling nation members of Greece, Ireland and Portugal.  To make the European situation worse, it looks like Spain and Italy may be the next EU nations to have financial troubles possibly requiring bailouts.

Ideally confidence returns to the markets so to stabilize this most recent dip and keep the markets from another large recession.  The upcoming days will point to whether things will again get worse before better, and if the IT industry will be able to withstand the recent market plunge.


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