stock market
An amazing sight was seen in the stock market on Wednesday. On one hand, there is an outcry in the shares of Artificial Intelligence (AI) and chip manufacturing companies across the world, while on the other hand, the shares of our own Indian IT companies have gained momentum. For the second consecutive day, shares of Infosys, TCS, HCL Tech, Wipro, Coforge and Tech Mahindra rose by up to 5 percent.
In fact, foreign investors are now beginning to fear whether they will earn any money from the money that the world’s leading tech companies are indiscriminately spending on AI. In this panic, he started selling shares in foreign markets. But their fear became a big opportunity for the Indian IT sector.
Talking about the price, TCS shares rose by 3.2 percent to Rs 2,476 and Infosys shares rose by 4.1 percent to Rs 1,152. HCL Tech and Wipro also had a rise of more than 2 percent. The condition of small and medium IT companies was even better. After good quarterly results, Coforge’s shares jumped another 5 percent. This rise is also special because till recently Indian IT companies were struggling with many difficulties like low expenses and the threat of AI.
Foreign investors are losing confidence in AI
Big investors in foreign markets are now looking at AI companies with suspicion. Mark Luschini, chief investment strategist of ‘Jenny Montgomery Scott’, says that now people are selling shares of AI companies without thinking. The recent huge fall in America’s tech stock market ‘Nasdaq 100’ is the result of this nervousness.
On top of that, China has also increased the tension. A Chinese company (CXMT) jumped 500 percent as soon as it entered the market. Apart from this, there is news that a Chinese government company has started making its own chip making machines. Market experts fear that Chinese companies may become a big threat to Korean companies by increasing their work.
Heavy selling in Asian markets
The effect of this fear regarding AI companies was clearly visible on the rest of the markets of Asia. South Korea’s stock market fell by 12 percent during the day on Wednesday. Despite the profit of the big chip company SK Hynix increasing six times, its shares fell by 14 percent because the market had higher expectations from it. Samsung shares also fell 10 percent. Same is the situation with the Japanese stock market, where the decline is continuing.
Indian IT stocks expected to make a great comeback
Amidst this turmoil in foreign markets, India’s stock market is emerging as a safe place. The report of well-known brokerage firm ‘Jefferies’ shows that more than 50 big foreign investors are now looking towards India with hope.
Jefferies believes that the slowdown regarding AI in foreign markets has opened a great path for the Indian IT sector to make a comeback. So far this year, the IT sector has fallen by 25 percent and big companies like TCS-Infosys are getting prices much below their previous high prices. In view of this, Jefferies has now changed its view on IT stocks and has included stocks like Infosys and Coforge in its choices.
Eyes fixed on US Fed’s decision
Now the eyes of the stock market are fixed on the meeting of the Central Bank of America (Federal Reserve). It is believed that this time interest rates will not increase, but the possibility of rate increase in September is much higher than before.
Interest rates in America have a direct impact on our IT stocks. If rates increase there, American companies may reduce their budgets, due to which Indian IT companies may face difficulty in getting new work. At the same time, if the dollar strengthens, the foreign earnings of Indian IT companies increase in rupee terms, the benefit of which is directly reflected in their profits.
Disclaimer: This article is for information only and should not be considered as investment advice in any way. TV9 Bharatvarsha advises its readers and viewers to consult their financial advisors before taking any money-related decisions.
