Nifty IT: On Tuesday, March 12, the morning trading session saw some decent movement in the majority of IT stocks, supporting their sectoral index in an otherwise dull market.
In the morning trade on Tuesday, the Nifty IT index saw a rise of approximately 1.5%, while most sectoral indices saw losses. This was due to the rise in 1-2 percent of stocks, including TCS, HCL Tech, Tech Mahindra, and Infosys.
As all ten of the index’s components were in the green, the Nifty IT index was up 1.33 percent at 37,480 at 9:30 am. At 22,339 at the time, the equity benchmark Nifty 50 was nearly flat.
There has been some consolidation in the Nifty IT index recently. The index has decreased by roughly 1% over the past month, while the benchmark Nifty 50 has increased by almost 3%.
Nifty IT has performed better than Nifty 50 over a longer period of time, though. For example, over the past three months, Nifty IT has increased by 11%, outpacing the 7% gain observed in Nifty 50. In the same way, Nifty IT has gained 13% over the past half-year, marginally surpassing the 12% gain seen in Nifty 50.
Due to the US economic downturn and rising interest rates, the IT industry has been struggling with low demand.
Nirmal Bang Equities, a brokerage firm, anticipates “additional potential decline in earnings for the Indian IT services sector for both FY25 and FY26 due to aggressive revenue projections in light of industry feedback, uncertainties regarding the timing of growth recovery, the trajectory of US interest rates, and the unpredictability surrounding US economic policies following the presidential elections.”
“Infosys and HCL Tech have both guided constant currency (CC) revenue growth of 4–7%. If there is no significant reduction in the Fed funds rate or if enterprise customers become uneasy due to the US election, then even this could be in jeopardy. In a report released on March 11, Nirmal Bang stated, “We see’slower for longer’ demand conditions through 2024 that could pare consensus earnings expectations.”
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