The Nifty IT index traded positive in Tuesday's trading session amid an upbeat broader market rally over US Fed's rate-cut optimism and Wall Street seeing a bull run.
Nifty IT index was one of the top sectoral gainers on August 20 by rising 1.2 percent to 52-week high of 41,746.55 points.
The index has gained 8.21 percent 7 sessions in a row. It gained 1.55 percent on August 9 and traded in green in seven session until today.
L&T Technology Services Limited was the top gainer in the pack, leading with a gain of 1.67 percent, closely followed by Mphasis Limited (1.49 %), Persistent Systems (1.24 %), Tech Mahindra (1.07 %) among others.
On August 20, India's top IT services exporter Tata Consultancy Services (TCS) was up 0.78 percent to quote at Rs 4,524.80 on the NSE. Second largest IT company Infosys advanced 0.85 percent to Rs 1,880.65 per share, Wipro, higher by 0.82 percent.
The Nifty IT index was up 0.69 percent at 41,521.95 at the time of writing this report. Investors will focus on the Jackson Hole symposium later this week, where Fed Chair Jerome Powell is likely to acknowledge the possibility of a rate cut in the September meeting.
Kushal Gandhi, Technical Analyst, StoxBox maintained a positive outlook for the IT sector and recommended holding onto the investments.
"Following a strong surge of over 250 percent from the Covid-19 lows, the IT sector corrected only 33 percent. During this phase, it moved sideways, indicating that confident investors were holding onto their investments and managing downturns, showing a positive sign. The index has now broken out of this phase, entering a more dynamic stage, marking the beginning of an advancing stage 2 uptrend. Interestingly, at the breakout point, seen as an opportune time to buy, the reported fundamentals of the companies might appear to be negative to neutral but are anticipated to improve. Regarding price action, successive rally peaks exceed previous ones, and the retracements are showing progressively higher lows, indicating a positive trend. Therefore, we maintain a positive outlook for the IT sector and recommend holding onto investments. We recommend considering stocks such as TCS, HCL Tech, and Eclerx Services in the large-cap segment and KPIT and Newgen Software in the midcap and smallcap category for a potential 10-15 percent upside," said Gandhi.
On August 20 at noon, benchmark NSE Nifty50 index was up 0.56 percent or 138.55 points at 24,711.20, while the BSE Sensex was up 0.54 percent or 437.71 points at 80,862.39.
Among the 10 stocks in the Nifty IT index, 9 were trading in the green, with just HCLTech down marginally by 0.16 percent.
The index's consistent uptrend was witnessed amid hopes of the US Federal Reserve will cut interest rates in the upcoming Federal Open Market Committee (FOMC) meetings this year.
Economists polled by Reuters predict a 25 basis points cut at each of the remaining three meetings of 2024.
Wall Street benchmark indices kept rising ahead of this week's Federal Reserve Symposium at Jackson Hole. For the eighth day in a row, the S&P 500 and the Nasdaq saw gains, marking the beginning of their best winning streaks of the year.
The tech-heavy Nasdaq Composite added 1.4 percent to close in on the 17,876.77 mark.
Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
