The technology stocks are one of the brightest spots in the market today. While the benchmark indices are flat, the Nifty is holding above 22,100 led by tech biggies like Wipro, Infosys and Tech Mahindra. Even counters like HCL Tech that saw sharp cut in trade on February 28 are now trading flat. In fact, of one takes a look at trade on February 28, the technology sector was badly bruised. The stocks have however recouped some ground from Friday’s damages.
The Nifty IT Index is up 1% intra-day trade, a slight uptick from the levels it closed on Friday. If we track the movement of the Index over the past 5 days, it has fallen over 300 points but the stocks are clocking brisk gains intra-day. In many ways the IT stocks are mirroring the traction seen across US markets last week. If we track the US markets, the tech-led Nasdaq closed higher after the drubbing that the tech stocks in US received in the previous session.
LTI Mindtree, Wipro, Infosys are among the top gainers on Nifty IT Index. Interestingly the Nifty IT Index has delivered positive returns in 8 out of 16 years
ALSO READFour reasons why midcaps and small caps are falling today Why are tech stocks rising today
The main reason why the tech stocks are rising include –
Buying after recent sharp cut
The recent sharp cut in the technology stocks have made valuations significantly attractive. Many of the key tech stocks, like the top gainer today LTI Mindtree also got favourable brokerage recommendations and Buy rating. Even Coforge, another big loser on Friday, also got some favourable Buy recommendations.
Positive cues from US markets
The US markets closed higher on Friday. The Nasdaq ended up 1.63% while the S&P 500 almost 1.59%. The 4% plus individual surge in stocks like Nvidia and Tesla helped the S&P 500’s gains. Interestingly, in the previous session, i.e. on February 27, Nvidia stock slumped to one of its biggest one-day losses. However, the following session it rose 4%. In mamy ways we can see the same trend being followed in the Indian markets as well.
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