Nifty IT index gains 1.6% despite Accenture’s cautious outlook; what’s driving the rally?
Breaking a two-day losing streak, the Nifty IT index staged a strong rebound in today’s trading session, surging by 1.6%. Notably, this recovery comes despite cautious projections from IT services provider Accenture, which anticipates lower revenues for the second quarter of fiscal 2024.
Accenture cited slower decision-making related to budgets, especially in the tech and media sectors, as a key factor influencing the guarded outlook.
On Tuesday, the company reported a weak 1% YoY revenue growth in 1QFY24. The revenue from the communications, media, and technology industry group dropped 10% in the first quarter of fiscal 2024.
Also Read: Rupee appreciates 4 paise to trade at 83.14 against the US dollar
It expects second-quarter revenues to be lower than the preceding three-month period, projecting a range of $15.40 billion to $16 billion or negative 2% to 2% in local currency. However, it maintained its full-year revenue growth guidance in the range of 2% to 5% in local currency.
“ACN’s performance and commentary are broadly in sync with its Indian peers, suggesting no material improvement in the demand environment with macro uncertainties persisting. NIFTY IT has rallied 9% in the last month, with the majority of this rally coming after the Fed’s dovish stance on rate hikes, post-easing inflation data, and likely trajectory.”
“Stable macros and dovish stance reduce the risk to our/consensus FY25 estimates of high single-digit revenue growth in Tier-1 companies, which builds some improvement in discretionary spending. We believe large caps offer a better risk reward compared with mid-caps. Our pecking order is INFO, WPRO, TECHM, HCLT, LTIM, and TCS among Tier-1 companies,” said brokerage firm Emkay Global Financial Services.
Also Read: 2023 in review: Over 40 Nifty50 stocks rose between 10% and 90%; Tata Motors, NTPC top gainers
The Nifty IT index began today’s trade at 33,492 points as compared to the previous closing of 35,345 but strengthened to reach 35,928 points by gaining 1.6%. All 10 constituents of the index are currently trading in the green, with Persistent Systems leading the way with a remarkable rally of 2.3% at ₹7,228 apiece.
Following closely are L&T Technology Services (up 1.9%), Wipro (up 1.9%), Tata Consultancy Services (up 1.5%), LTIMindtree (up 2.5%), Infosys (up 1.2%), MphasiS (up 0.9%), and Coforge (up 0.9%).
Disclaimer: We advise investors to check with certified experts before taking any investment decisions.
Unlock a world of Benefits! From insightful newsletters to real-time stock tracking, breaking news and a personalized newsfeed – it’s all here, just a click away! Login Now!
Download The Mint News App to get Daily Market Updates.
Published: 20 Dec 2023, 12:34 PM IST
