Nifty IT soars to all-time high as growth outlook improves
Nifty IT Index hit an all-time high on Tuesday after brokerage HSBC said that it expects growth to rise to 6-7% in FY26 — from 3-4% in the past two years — led by a recovery in the US market.
The IT index gained 0.8% and closed at record levels while the benchmark Nifty closed marginally lower. LTI Mindtree and Mphasis gained 3% and 2.4% respectively. Persistent Systems, HCL Technologies, Wipro and Infosys advanced over 1% each. Out of the 10 stocks in the IT Index, 8 advanced while 2 declined on Tuesday.
«The IT Index hitting an all-time high indicates that rerating is likely, and investor interest is coming back to the sector as its valuations offer comfort with a higher return on equity,» said Anita Gandhi, Institutional Head, Arihant Capital Markets.
Gandhi said that amid uncertainty due to a slowdown in demand and lower-than-estimated GDP, some investors are taking safer bets on IT stocks as they are dependent on the robust US economy.
Analysts at HSBC said that 'improving growth should attract investor interest away from some other sectors, where the demand outlook is deteriorating but valuations are high.' The brokerage said that it is less constructive on mid-tier companies as valuations remain rich amid decelerating growth.
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