TCS, Infosys, Coforge jump up to 4% as global AI trade reverses, IT stocks rally
Mumbai/IBNS: Indian IT stocks witnessed strong buying for the second consecutive session on Wednesday, with shares of Tata Consultancy Services (TCS), Infosys, Coforge and Larsen & Toubro (L&T) rising sharply amid improving earnings sentiment and a global reversal in the artificial intelligence (AI) trade.
The rally also helped the broader Indian equity market rebound after ending marginally lower in the previous session.
IT Stocks Lead the Rally
Shares of TCS, Infosys and Coforge gained between 2-4 percent in early trade.
The Nifty IT index jumped nearly 3 percent, led by Coforge, which surged around 4 percent. Infosys and L&T were among the other major gainers.
What's Driving the Surge?
According to NDTV Profit, the rally has been driven by improving earnings expectations, renewed optimism from brokerages and a reversal in the global AI trade.
Investor sentiment also improved after a sharp sell-off in US technology stocks, prompting bargain buying in quality IT counters.
Global Tech Sell-off Triggers Rebound
US technology stocks had witnessed heavy selling in recent sessions, wiping out nearly $1.6 trillion in market value over five trading days.
The sell-off was driven by growing investor concerns over the massive spending on artificial intelligence, disappointing corporate earnings and rising capital expenditure commitments by major technology companies.
As valuations turned attractive, investors returned to the sector, triggering a rebound in global technology stocks that spilled over into Indian IT shares.
Broader Market Rebounds
The strength in IT stocks lifted the broader market, with the BSE Sensex rising nearly 800 points to 77,559.48, while the NSE Nifty 50 gained 0.9 percent to 24,203.20 in early trade.
Apart from IT, buying interest was also seen in banking and auto stocks, supported by positive global cues and easing geopolitical concerns in the Middle East.
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