It’s been a choppy Friday for the markets so far. The Nifty and Sensex tumbled hard in the morning trade but recovered some ground eventually. The Nifty 50 dropped well past the 23,500 support zone and slipped to 23,344.35. But then recouped back above this key support level. The Sensex too fell 500 points before shifting gears to green. One of the key reasons for mid-morning recovery was the stupendous run in the tech space. The Nifty IT index is up nearly 4% and TCS is up 6%. The stocks that are pulling the Nifty up include TCS, Tech Mahindra, Wipro, Infosys, and HCL Technologies.
4 reasons IT stocks are surging in a volatile market
Here is a quick analysis of the key reasons that helped the IT stocks clock smart gains amidst volatile market movement-
1. TCS upbeat on demand pick-up, discretionary spend
The surge in the index came after TCS’s Q3 earnings report highlighted demand pick-up and revival in discretionary spending. Brokerages are bullish on the company on strong deal wins, discretionary spending, and positive management commentary on growth. For most, the demand commentary improving materially with a sharp pick-up in its order book is one of the biggest positives. Additionally, the company’s focus on AI is seen as another key positive for demand ahead.
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The TCS earnings have been a sentiment booster for the ITIndex. In fact, the Nifty IT Index is among the few sectoral indices that’s up firmly in the green amidst choppy trade. Even an analysis of the stocks that are up smartly includes an array of IT stocks. The Nifty IT Index is among the top gainers. In a 6-month timeframe, The Nifty IT Index is up nearly 20% and it has yielded over 28% return over 1 year.
According to V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services,
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