Nifty IT soars 3% tracking positive global cues, Coforge, Persistent Systems lead pack

Nifty IT has crashed 20 percent over the past six months.

The information and technology gauge Nifty IT index jumped three percent in the opening session on April 8, tracking positive global cues as the risk-off mode ebbed, giving way to a bullish market sentiment.

At 9.35 am, the Nifty IT index was trading near 33,050, up 1.2 percent, while Coforge, Persistent Systems and Infosys led the gains. Mid-cap IT players outperformed their large-cap peers on the index. However, the index gave up a large portion of its opening gains.

The positive gains in IT stocks follow the U.S.-based tech-heavy Nasdaq Composite's close in the green overnight, after the index was hammered over the past month. The Wall Street gauge has tanked 14 percent over the past month, entering the bear market territory.

Follow our market blog to catch all the live updates

In the previous session, Nifty IT crashed 2.5 percent in trade as the global risk-off sentiment hit Indian equities.

On the IT index, mid-cap tech services players such as Mphasis and Coforge fell by 5 percent percent while giant Infosys fell 3.2 percent.

The sell-off came amid concerns of sales growth, as these IT players depend on services exports to the U.S. for a large portion of their revenue. Following the imposition on the tariffs, deal wins from America-based clients are likely to slow down, impacting the topline of these firms.

International brokerage Morgan Stanley suggested that global macroeconomic shifts and technological changes pose rising risks to the domestic information technology sector, potentially impacting valuations and revenue growth.

Given the negative sentiment, IT stocks have been underperforming on fears on US growth slowdown impacting the Indian tech industry. Fears of tariffs have resulted in a broad-based sell-off in the IT index, the Nifty IT gauge has slumped six percent over the past month, nosediving 20 percent over the past six months to wipe of crores in investor wealth.

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.