Nifty IT index soars to new 52-week high after in-line results by IT majors

IT stocks rally: Stocks like Infosys, Coforge, Persistent Systems, L&T Technology Services, and HCL Technologies are poised for the next leg of upside, with a move of 10 per cent that cannot be ruled out, the expert noted.

The index logged an all-time high of 39,446.7 nearly two years ago, on January 4, 2022.

Nifty IT: Shares of information technology (IT) companies hogged all the limelight on January 12, after the IT giants TCS and Infosys posted in-line numbers for the quarter ended December 31, 2023 (Q3 FY24). As a result, the Nifty IT index hit a new 52-week high of 36,290.3, gaining a whopping 4.48 per cent in intra-day trade.

Of the 10-stock index, Infosys led the rally with over 6 per cent gains, while other notable gainers are Mphasis (up over 5 per cent), Coforge (up over 4 per cent), Persistent Systems (up over 4 per cent), and TCS ( up 3.7 per cent), among others.

TCS, as a positive surprise, posted margin expansion in Q3, while Infosys also posted in-line Q3 numbers.

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The index logged an all-time high of 39,446.7 nearly two years ago, on January 4, 2022.

"With inline results from Infosys and better-than-expected results from TCS, IT stocks will see some action today. Even though there is no positive message from the management commentary, the market is likely to respond positively to the absence of any bad news. But the upside for TCS and Infy will be limited since it will take time for clarity to emerge on the prospects for the sector in FY25," Dr. V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services, said.

Technicals also boast of the sustenance of the current up move. Avdhut Bagkar, derivatives and technical analyst at StoxBox, is of the view that the stability over 36,000 levels will spark a fresh upside in the IT index.

The present move is suggesting a continuation in the same direction, and the potential upside towards 37,000 from a short- to medium-term perspective cannot be ignored.

Stocks like Infosys, Coforge, Persistent Systems, L&T Technology Services, and HCL Technologies are poised for the next leg of upside, with a move of 10 per cent that cannot be ruled out, the expert noted.

Maintaining a different view, Jigar Patel, Sr. Manager- Equity Research- Anand Rathi said at the current juncture, one should avoid adding longs to IT stocks and book profit in the zone of 36500–37500. The expert also pin-pointed that after striking a low of 26,184 on April 17, 2023, the index has reversed its bullish bat structure and given a massive return of 39% in just 9 months.

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