IT stocks jump up to 5%, led by midcap Coforge. Can the sector shed its 2-year underperformance?
IT stocks were on a roll on Tuesday led by midcap counter Coforge which jumped 5.5% to hit its fresh 52 week high of Rs 6,849.50 on the NSE. However, Infosys led the way in terms of contribution to the index. The rally comes amid favourable views taken by domestic brokerages Motilal Oswal and Nuvama Institutional equities.
Nifty IT index was the second best performing sector today (behind Media) in terms of percentage gains at 2.3% or 980 points with all 10 stocks trading in the green.
Other IT index constituents including LTIMindtree, Mphasis, Persistent Systems, L&T Technology Services (LTTS), Infosys, Tech Mahindra, HCL Technologies, Tata Consultancy Services and Wipro gained between 4% and 2%.
The IT sector is expected to remain in focus ahead of the Federal Reserve's policy meeting beginning September 17. The two-day affair would end with the announcement on policy rate along with the indication of direction of the US economy.
«The IT services sector could be on the cusp of recovery after enduring a prolonged period of discretionary spending cuts. As we look ahead to the next 2-4 years, the harsh winter appears to be behind us, and the foundations for a sustained revival in the flow of business and smaller deals are being laid,» Motilal Oswal said in a note.
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