Nifty IT hits fresh 52-week high, up 27% since April
It's been approximately five months since April 17, 2023, when the Nifty IT index touched a 52-week low of 26,184.45. Since then IT stocks have shown an impressive comeback. Earlier today, the Nifty IT index reached a new 52-week high of 33,387.30. In the last five months, i.e. since April, it has surged by 27%. In comparison, Nifty50, also currently at its peak, has risen by 20.5% from its 52-week lows. So, what led to this remarkable recovery?
Individual stock performances
Each stock within the Nifty IT index has witnessed a rise of over 20% from their respective lowest points in the last year. Persistent Systems takes the lead as the top performer, with an impressive 91% gain. Coforge closely follows, experiencing a 73.5% rise from its one-year low. HCL Tech, Tech Mahindra, Infosys, Wipro, and TCS have all recorded substantial gains ranging from 22% to 48%.
Why are IT stocks rising?
IT stocks have surged for several reasons. Firstly, concerns about a US recession have eased, and there is a strong belief that the US Federal Reserve won't raise interest rates soon due to stable inflation. The NASDAQ has also climbed by almost 20% in the last year, bolstering positive sentiment for IT companies, both in India and globally. From a technical perspective, the Nifty IT index broke out of a 15-month consolidation phase, adding momentum to its upward trend.
Should you invest in IT stocks now?
Even though IT stocks have seen substantial increases, industry experts believe there is still underlying value in these shares. Some suggest a cautious approach, like staggered investments or systematic investment plans (SIPs), when entering the market. Alternatively, others advise taking profits now and considering IT stocks if there's a market correction.
