Information technology (IT) stocks on Monday shed the steep losses of Friday. All the major IT stocks remained among the top gainers, leading to decent gains in the Nifty IT index.
The index, which had declined over 5 percent in Friday’s trade, climbed over 2 percent in the early trade. It remained among the biggest gainers among the 19 sectoral indices.
While the index opened only marginally higher, it soon climbed over 606 points to reach 29,136 points compared to the previous close of 28,530 points. This was a gain of over 2.1 percent.
Among the IT stocks, all the major ones remained in the top gainers list. Tech Mahindra surged up to 2.8 percent, Wipro climbed by 2.5 percent, Tata Consultancy Services jumped over 2 percent, while Infosys inched up to 2.1 percent higher.
The gains came after the rout on Friday triggered by the weak FY27 guidance given by Infosys, the second-largest IT company of the country.
According to experts, even as the IT segment has seen an uptick in stock prices today, the sentiment remains cautious towards the sector.
Slower decision-making, rising competition, and modest growth visibility are still the challenges that the sector will need to tackle before returning to a confident growth trajectory.
The Nifty IT index has lost about 25 percent since the start of the year, remaining the worst-performing index on the bourses. This is worse than the previous calendar year, when the index had declined by 15 percent to remain the second-worst performing index.
According to experts, the surge of artificial intelligence will continue to pressure the sector. While the IT players are leveraging AI to lower operating costs, a large part of that gain is being transferred to clients instead of improving margins.
That is the reason the sector is reporting a stable deal flow, but revenue has not climbed at the same pace.
