Infosys, TCS, HCL Tech and other IT stocks surge up to 4%. Here’s why

Shares of information technology (IT) companies such as Infosys, TCS, HCL Tech, and Persistent Systems rose by up to 4%, driving the Nifty IT index up by 3%, as an anti-AI trade unfolds in global markets, indicating concerns about a bubble forming in AI stocks.

In the afternoon, Infosys shares surged as much as 4% to their day’s high of Rs 1,543 per share, while TCS shares climbed to 2% to their intraday high of Rs 3,150 per share. HCL Tech shares jumped over 4% to Rs 1,666 per share on the NSE. Persistent Systems also gained over 4% to its day high of Rs 6,330 per share.

The growing AI bubble fears, analysts suggest, are beneficial for Indian equities as FPIs are likely to start buying in India if the present trend of AI trade fading sustains for some more time. “India’s outperformance vis-a-vis other AI markets like South Korea and Taiwan during the last few days is an indication of this trend,” V K Vijayakumar, Chief Investment Strategist at Geojit Investments Ltd, said.

Recently, Alphabet CEO Sundar Pichai added to caution, telling the BBC that parts of the AI boom reflect irrationality and that no company would be spared if the bubble bursts.

On Tuesday, the tech-focused Nasdaq Composite slid nearly 1.2% as investor sentiment turned cautious. Ahead of Nvidia’s third-quarter earnings due Wednesday, markets are reassessing how long the year’s AI-driven surge can hold. Nvidia was among the biggest drags, dropping as much as 3% intraday before closing about 2.81% lower. Other big tech names also wilted, with Amazon down roughly 4.3% and Microsoft slipping around 2.7%.

Also Read: Infosys shares gain 3% as firm launches Rs 18,000 crore buyback on November 20Attention is now shifting to Thursday’s delayed September jobs report, the first major economic data release since the US government shutdown disrupted schedules. The numbers are expected to guide expectations for the Federal Reserve’s next steps. After weeks of scaling back confidence in imminent rate cuts, traders are increasingly becoming unsure of what the US Fed will do.In Wednesday’s session, Infosys shares were making the headlines after it said it will open its Rs 18,000 crore share buyback on Thursday, November 20, with the window scheduled to close on Wednesday, November 26.

Shareholders cleared the proposal on November 6, paving the way for the company to repurchase up to ten crore fully paid-up equity shares. The buyback will be executed at Rs 1,800 per share and is open to investors who held Infosys stock as of the record date, November 14.

Also read: Worried about an AI stock bubble? That might be good news for Nifty bullsAt about 1:45 PM, the Nifty IT index was trading at 37,031, higher by 2.94% from the last close on the NSE. Infosys, TCS, HCL Tech, Persistent Systems, LTIMindtree, Tech Mahindra, Coforge, Wipro, and Mphasis were trading nearly 3% higher.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)