Rs 82,500 crore rally in 3 days: Why TCS, HCL Tech, other IT stocks jumped up to 12% in 3 days and will the boom last?
Indian IT stocks have rebounded sharply. The Nifty IT index has risen 8%, adding Rs 82,500 crore to the sector’s market capitalisation. The rebound follows a selloff in global AI-linked stocks driven by concerns over stretched valuations, concentration risks and uncertain returns on heavy AI investments.
Over the past three trading sessions, shares of major IT companies like TCS, HCLTech, Infosys, and Wipro surged by up to 12%. This rally occurred after a recent sell-off of AI-linked stocks in Asian and US markets, which raised concerns about high valuations, concentration risks, and the time it takes for significant AI investments to generate returns.
The Nifty IT index surged 8% over the same period, adding Rs 82,500 crore to the sector's market capitalisation. HCLTech led the gains with a 12% increase, followed by TCS (11%) and Tech Mahindra (10.60%). Infosys and Wipro also saw gains of 9% and 7%, respectively. The AI selloff was triggered by rising US consumer inflation faster than expected, prompting concerns about potential Fed action and negatively impacting global equities.
Asian markets opened lower that day, with MSCI's Asia-Pacific index falling 1.2%, led by a 5.6% slump in South Korea's KOSPI. In response to the AI concerns, Accenture CEO Julie Sweet emphasized that the opportunity presented by AI is significant, and while the technology may impact the consulting industry, the new demand created will far outweigh what is replaced.
Accenture expects to grow revenue and profit margins through 2029, backed by acquisitions and organic growth. The IT sector's outlook remains cautiously optimistic, with Axis Securities noting the pace of global AI adoption as a key factor in earnings growth and valuations.
Written by urgent.news from The Economic Times - Top News's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
