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HomeMarket NewsInfosys, TCS, other IT stocks in focus after ₹1.1 lakh crore rout; Here are some positive triggers
The rebound in US Software stocks took place overnight after Anthropic announced partnerships with multiple SaaS companies, including Salesforce, posturing a message that they are here to integrate with software solutions providers and not to disrupt or displace them. This has been a key reason as to why these software stocks sold off in the first place.
Shares of Indian IT companies, Infosys Ltd., TCS Ltd., Wipro Ltd., HCLTech Ltd., Tech Mahindra Ltd., Persistent Systems Ltd., Coforge Ltd., L&T Tech Services Ltd., KPIT Tech Ltd. among others will remain in focus on Wednesday, February 25, after Tuesday's rout wiped out nearly ₹1.2 lakh crore in market capitalisation of these companies cumulatively.
Such was the extent of Tuesday's sell-off in Indian IT companies, that eight out of the top 10 losers on the Nifty 500 index were tech shares.
However, there are some positive triggers that could spark a relief rebound rally for these companies. Here are some of them:
First, software stocks, which have been in the line of fire in the US ever since Anthropic dropped new AI tools since the start of the month, staged a relief rally overnight. Salesforce, which will be reporting its results later today, gained over 4% in Tuesday's session.
The rebound took place after Anthropic announced partnerships with multiple SaaS companies, including Salesforce, posturing a message that they are here to integrate with software solutions providers and not to disrupt or displace them. This has been a key reason as to why these software stocks sold off in the first place.
Salesforce shares were up over 4% overnight, while others like Docusign, ServiceNow, also gained between 1% to 2%.
The second important factor is that most of these IT stocks are now in "oversold" territory. In just the first two months of the year so far, seven out of the 10 Nifty IT constituents have already declined 20% or more. In fact, the Nifty IT index, as of Tuesday's close, was on course for its worst monthly performance since April 2003.
Most analysts, at least those bullish on the sector, have said that the concerns surrounding the Anthropic-led disruption are overblown, a point reiterated by Wedbush Securities on Tuesday.
Indian IT companies fell between 4% to 10% on Tuesday, leading to a wipe out of over ₹1 lakh crore in market capitalization.
