Stock market today: Amid buzz about the AI slowdown, Indian IT and tech stocks saw strong buying in the early morning session on Tuesday. The Nifty IT index shot up over 4%. Among the Indian IT majors, Tata Group’s Tata Consultancy Services (TCS) share price is up by near 5%, HCL Technologies shares surged over 6%, Tech Mahindra share price went up around 5%, LTM shares went up over 4%, whereas Infosys shares skyrocketed around 4.50%.
According to experts, IT stocks are rising due to the AI-slowdown buzz in the global markets. They said the AI-slowdown is a positive development for the Indian IT and tech shares, and these sector stocks are expected to attract bulls’ attention until the AI-slowdown buzz subsides. They advised investors to look at small-cap IT stocks rather than mid-cap or large-cap IT shares.
AI-slowdown buzz
Highlighting the reason for skyrocketing IT stocks, Amit Goel, Chief Global Strategist at PACE 360, said, “IT and tech stocks witnessed heavy beating when the AI stocks were on fire in the global markets. However, once the AI buzz has cooled down and there is buzz for the AI-slowdown, these beaten-down stocks are expected to attract the bulls’ attention.”
Goel said that IT stocks are available at a discount, as they have been major casualties in every sharp sell-off on Dalal Street in recent years.
Seema Srivastava, Senior Research Analyst at SMC Global Securities, said, “It is a double bonanza for the IT stocks today as the market is also looking positive in the early morning session. As IT stocks are in the oversold zone and the majority of the IT stocks are available at attractive valuations, bulls are expected to prefer IT stocks over other segments.”
Small-cap vs mid-cap vs large-cap IT stocks
However, to maximise this bull trend in the IT stocks, Seema Srivastava of SMC Global Securities said, “Ideally, one should first buy large-cap, then mid-cap and then small-cap IT stocks. However, I would advise investors to prefer small-cap stocks ahead of mid-caps and large-caps as small-cap stocks have shown resilience during the recent beating and hence chances for small-caps to outperform mid-caps and large-caps are high.”
Disclaimer: This story is for educational and informational purposes only. The views and recommendations above are those of individual analysts or broking companies, not Mint. We advise investors to check with certified financial experts before making any investment decisions.
