IT stocks have taken a backseat on Dalal Street after more than two years of significant moves that beat the overall market. Weakness in the IT space comes despite the rupee's slump to all-time lows against the US dollar. A stronger dollar is usually good for exporters such as IT.

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The Nifty IT is in what is known as the bear zone in market parlance — a situation when a stock or an index recedes more than 20 percent from its recent peak.

As of Friday's closing levels, the Nifty IT is 24.9 percent below its all-time high — touched in January 2022. The Nifty50 is 15.2 percent below its record high of October 2021 — a retreat of more than 10 percent from the peak is known as correction territory.

Barring Tata Consultancy Services (TCS), the country's largest software exporter, all of the index's components are deep into bear territory.

Two years of sustained gains have pushed IT valuations to elevated levels thanks to the higher spending on technology during the pandemic.

"A major drag on IT and financial stocks is the relentless selling by foreign portfolio investors, which is likely to continue since the dollar is appreciating and US bond yields are turning attractive," VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services, told CNBCTV18.com.

Besides, Indian IT stocks are — once again — mirroring the trend on Wall Street.

"The sharp correction is fuelled by negative sentiment towards tech businesses both in the US and China. Technology stocks were the recipients of big investor money, especially from hedge funds and venture capitalists over the past few years. However, with their growth slowing down, such investor appetite has partially dried up," Tanushree Banerjee, Co-Head of Research at Equitymaster, told CNBCTV18.com.

In Banerjee's view, the rupee's slide against the US dollar may not do much to stem the slide in tech companies' earnings in the near term. "However, tech companies with solid moats and growing product baskets continue to have solid long-term prospects," she said.

Can you start buying IT stocks now?

"What we are witnessing now is a correction from high valuations, which are approaching buyable levels," said Vijayakumar.

He believes a five percent correction in large-cap IT stocks can trigger aggressive buying.