Infosys, Wipro, Tech Mahindra and other IT stocks surged to record high levels in intraday on Thursday, pushing the Nifty IT index to a record high of 29,835.90. S&P BSE IT index surged to a fresh record high of 30,507.48, rising 1.5 per cent. The rally in IT stocks has come on the back of upbeat April-June quarter results for the current fiscal. So far IT companies such as TCS, Infosys, Mindtree, L&T Technology Services, among others have declared their first quarter earnings. Wipro is scheduled to announce its earnings on Thursday. Analysts say strong long term fundamentals, weakening rupee and stronger quarterly growth numbers have benefited the Nifty IT index and its main stocks excluding TCS.
Technically, Nifty IT index and stocks have gotten into an overbought zone where investors should exit their previous buy positions, said an analyst. “Infosys stock needs to close above Rs 1,585 to hit Rs 1,615. Of the IT stocks, only TCS looks great for long term accumulation,” AR Ramachandran, Co-founder & Trainer, Tips2Trades, told Financial Express Online. From the BSE IT index, over 15 stocks hit their respective record highs on Thursday including Infosys, Wipro, Tech Mahindra, LTTS, Coforge, Happiest Minds Technologies, Tata Elxsi, Mindtree and Sonata Software.
Infosys share price hit a fresh record high of Rs 1,597.25 on the BSE in the intra-day trade, after the company raised its revenue growth guidance for FY22 buoyed by a robust deal pipeline. The stock crossed its previous high of Rs 1,590.85 touched on June 30, 2021. Wipro shares surged to 579.75, up 2.5 per cent, Tech Mahindra to Rs 1,119.60, Mindtree to Rs 2,738.65, L&T Technology Services to Rs 3,447.35, Happiest Minds Technologies to Rs 1,435.05, and Coforge to Rs 4,563.70.
Analysts say even as the market is always forward-looking, the current rally is driven by an excellent earning season. Strong quarterly results of few major market players like Infosys, L&T have come as a big positive for the markets. Ashis Biswas, Head of Technical Research, CapitalVia Global Research, told Financial Express that the absence of a nationwide lockdown and the limited impact of lockdowns announced by the states have reduced anxiety, and there is optimism surrounding the vaccination program. “We have observed the asset quality challenges faced by banks during the lockdown period to ease gradually. This should consider as a proxy for the upcoming economic upturn,” he added.
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