We have seen a significant market direction shift in FY2023–24. Investors are looking for new investment opportunities, as all the indices are at an all-time high.
IT sector stocks have been facing selling pressure, making the stocks potentially undervalued. This is catching investors’ attention.
Drop-In It Sector Stock
Companies like Accenture faced a drop in the price of their stock recently because of poor quarterly performance. This disappointment affected the US stock market and led to worries about IT stocks’ valuation. Additionally, factors like high inflation and slower economic growth in the US could further impact the performance of IT companies.
Following Accenture’s decline, the nifty IT index, which tracks major Indian IT stocks, also dropped recently. Companies like Infosys and Wipro faced the same backlash.
Expert Opinion
Experts believe the IT sector still looks promising despite short-term fluctuations, especially when the IT index is not far from its highest point. Since January 22, when nifty reached its highest point, it has been down by only 11% and is closing up daily.
Top players in the IT industry, like Infosys, TCS, and Wipro, trade at a lower level than other stocks. Technical analysis shows that the NIFTY IT index holds some promise for the future.
When and how to invest in the IT sector
- US Economy: When the US economy shows improvement, major Indian IT companies are expected to grow.
- Long-Term Vision: Investing in Indian IT stocks for the long term could be a good idea.
- Dollar Cost Averaging: Rather than making a lump-sum investment upfront, it’s suggested to follow a SIP strategy. This involves investing regularly over the next two to three quarters of the new financial year, even during the market dips. This approach helps compound and average the cost of shares over time.
Top Picks:
- TCS (Tata Consultancy Services)
- Wipro
- Infosys
- Coforge
- HDFC Tech (Housing Development Finance Corporation Technology)
Disclaimer: The views and recommendations above are those of individual analysts or brokerage companies, not TheStockMarketLive. We advise investors to check with certified experts before making any investment decisions.TheStockMarketLive. We advise investors to check with certified experts before making any investment decisions.
