Is the Rally in IT Stocks Coming to an End?

  • Investing.com
  • Stock Market News
Is the Rally in IT Stocks Coming to an End?
Credit: © Reuters.

By Aditya Raghunath

Investing.com -- The Nifty IT index comprising of 10 stocks has been on a steady fall since April 9 when it hit a high of 27,924. It closed April 20 at 25,877. It has dropped 7.3% during this time. Has its momentum run out?

In March 2020, the index fell to 10,898 from 16,900-levels in mid-February. Since then, it has been on a massive upswing, gaining over 53% as of its April 20, 2021 close. However, it is difficult for a rally to go on forever, and maybe April will see the index pause and take stock.

A weak rupee and companies bagging large deals have seen IT companies report good numbers for Q4 FY2021. However, that hasn’t translated into any substantial gains for the stocks.

Out of the three major IT stocks, bellwether Tata Consultancy Services Ltd. (NS: TCS ) has fallen 5.47% from April 9. Infosys Ltd (NS: INFY ) has fallen 6.38%. Wipro Ltd (NS: WIPR ) is the only one that has gained 4.22% since then. The numbers for tier II companies are worse. Larsen & Toubro (NS: LART ) Infotech Ltd (NS: LRTI ) has fallen 9.2%, Tech Mahindra Ltd (NS: TEML ) is down 6.93%, Mphasis Ltd (NS: MBFL ) is down 7.71% and MindTree Ltd (NS: MINT ) is down 8.67%.

With multiple news reports saying that the rupee could touch 76 to the dollar, it was expected that IT stocks would turn around. That doesn’t seem to be the case. Analysts say investors would be wise to let the situation play out for itself before taking any long positions in the market.

Drop an image here or Supported formats: *.jpg, *.png, *.gif up to 5mb

Error: File type not supported

Drop an image here or

100
  • Himanshu Madhwani @Himanshu Madhwani
    I was thinking of buying IT Tracker smallcase, would it be fruitful in a long run ?
    Like 0
    • Narasimmamurthy Rada @Narasimmamurthy Rada
      IT is cyclical
      Like 0
    • Sounak Kundu @Sounak Kundu
      Dont go by sector wise smallcase... better you diversify your portfolio.
      Like 1
    • Suyash Bele @Suyash Bele
      It will be. Make sure you buy on deep and hold for long.
      Like 0
    • Drop an image here or Supported formats: *.jpg, *.png, *.gif up to 5mb

      Error: File type not supported

      Drop an image here or

      100
  • Bipin Patel @Bipin Patel
    INR usually weakens just b4 quarterly results of IT Cos.😇
    Like 1
  • deepakcoach sharma @deepakcoach sharma
    Contra theory is best theory as time and again proven that do opposite what is expected by so called analyst, IT has become growth oriented stocks now irrespective of currency movement and always rewarded its investors , hold as of now
    Like 3
  • Deepanshu Ahuja @Deepanshu Ahuja
    So i was thinking to invest in HCL for a year or two ! Right time to buy or let it fall down more ??
    Like 1
    • Dipankar Gupta @Dipankar Gupta
      hcl has made a good bull run, let it breath a bit as far as i can understand seems like a good buying range
      Like 0
    • Dipankar Gupta @Dipankar Gupta
      HCL has made a good bull run, let it breath a bit as far as i can understand seems like a good buying range
      Like 0
    • Drop an image here or Supported formats: *.jpg, *.png, *.gif up to 5mb

      Error: File type not supported

      Drop an image here or

      100
  • Aaslin Sam @Aaslin Sam
    it would be great if we invested in March and sold out in before April 9!!
    Like 1
    • Dipankar Gupta @Dipankar Gupta
      then you would have been called a God, coz nobody can time the market.
      Like 1
    • Drop an image here or Supported formats: *.jpg, *.png, *.gif up to 5mb

      Error: File type not supported

      Drop an image here or

      100
  • Aaslin Sam @Aaslin Sam
    it would be great if we invested in March and sold out in before April 9!!
    Like 0

Related Articles