India Tech Stocks Reverse Downtrend, Outperform Benchmark Gauges
The IT gauge surged over 3% during the day and 8.5% during the last five sessions, while the Nifty rose over 1.5% during the day and 2.99% in the previous five sessions.
![<div class="paragraphs"><p>Source: Unsplash</p></div>](https://media.assettype.com/bloombergquint%2F2022-07%2F14b671fd-8ae5-4659-8000-63ef06a86dbf%2FBinary_code_laptop__Source_Unsplash_.jpg?rect=0%2C0%2C5575%2C3136&auto=format%2Ccompress&w=200)
Shares of India's information technology companies outperformed the benchmark indices on Friday, giving over two times the returns of Nifty in the past five sessions.
This follows a relatively poor performance by the tech companies over the last 12 months due to headwinds in terms of muted quarterly earnings, the US Federal Reserve rate cut scenario, and uncertain western markets.
The IT gauge surged over 3% during the day and 8.5% during the last five sessions, while the Nifty rose over 1.5% during the day and 2.99% in the previous five sessions.
![India Tech Stocks Reverse Downtrend, Outperform Benchmark Gauges](https://media.assettype.com/bloombergquint%2F2024-06%2Ff27684c4-8234-47f4-b583-5d11379558e0%2FNIFTY%20IT.png?auto=format%2Ccompress)
Big information technology companies will not see rerating in the short term as the growth outlook in key western markets remains uncertain, according to Avinash Gorakshakar, head of research at Research Profitmart Securities Pvt. "Unless the markets see strong earnings growth from frontline IT companies, the headwinds from western markets will continue. We need more clarity," Gorakshakar told NDTV Profit.
"The US economy is picking up, which could translate into a better order book and better positioning for IT companies," he said. "It's still a long way before we can see some rerating in larger companies."
![India Tech Stocks Reverse Downtrend, Outperform Benchmark Gauges](https://media.assettype.com/bloombergquint%2F2024-06%2F612a2cc6-9a08-4fce-8e2f-a9fde674a2e3%2Fchart%20(58).png?auto=format%2Ccompress)
Wipro Ltd., Coforge Ltd., and Infosys Ltd. led the rally on Friday as they surged over 4% each. Shares of Persistent Systems Ltd. and LTI Mindtree Ltd. advanced over 3% each. This compares to a 1.62% rise in the benchmark Nifty 50 as of 1:30 p.m.
During the last five sessions, the shares of Persistent Systems rose by 12.5%, followed by Tech Mahindra Ltd., which advanced by 10.6%. Wipro, Coforge, Mphasis Ltd., and Infosys also rallied over 9%.