IT stocks extend gains for second day; Coforge, Infosys, Persistent Systems rise up to 3%

Shares of IT stocks extended gains for the second straight session on the BSE on Thursday, with midcap IT players Coforge and Persistent Systems leading the rally on value buying. Heavyweights including Infosys, Wipro, TCS and Tech Mahindra also traded higher. The positive momentum lifted the Nifty IT index nearly 2% after the opening bell, as the benchmark Sensex and Nifty 50 snapped a seven-day losing streak.

The Nifty IT index traded in the green. Shares of Coforge rose over 3% to Rs 1881.15 on the BSE, while shares of Persistent Systems climbed over 2% to Rs 5660. Shares of Infosys gained over a percent to Rs 1132.15 on the BSE.

Also Read | Why is market rising today? Sensex rallies 500 points, Nifty tops 24,200. 5 key factors behind market rebound

Why are IT stocks rallying in trade?

The rally in domestic IT stocks continued for the second day on value buying across midcap and heavyweight counters amid a weaker rupee. On Wednesday, India's IT majors defied a major global tech selloff over record-high bond yields.

''Reflecting weakness across Asian markets, Indian equities saw broad-based selling, though IT stocks outperformed on value buying and support from a weaker rupee,'' said Vinod Nair, Head of Research, Geojit Investments Ltd, according to a news report.

The Q1 earnings for Indian IT majors was in line with muted expectations for most largecaps, as per the report. The aggregate growth trajectory for the top nine IT companies remains stuck in low gear. Nifty IT has now underperformed Nifty 50 by ~11% in the year to date, despite the sharp bounce from May lows. The index now trades at ~18x 1-year forward earnings, expensive in the context of AI deflation.

Shares of Coforge have declined over 9% in the year so far. In the longer-term, the shares of the company have delivered over 19% returns in the last three years, and nearly 40% in the last five years.

Shares of Coforge have gained nearly 3% in the last three months, but declined over 9% in the year so far. In the longer-term, the shares of the company have delivered over 19% returns in the last three years, and over 39% in the last five years.

Shares of Infosys have declined over 6% in the last six months, and over 5% in the last one year. In the longer-term, the shares of the company have delivered over 19% returns in the last three years, and over 39% in the last five years.