IT stocks extended their strong run on Wednesday with the BSE IT benchmark rising 1.2 per cent as of 12.05 p.m. 10 of the 12 stocks on the BSE IT index traded in the green.
Most of the frontline IT stocks are trading at fresh 52-week highs. TCS shares hit a high of Rs 1,552, rising over 0.5 per cent, while HCL Tech advanced over 1 per cent to a new year-high of Rs 755.30.
Infosys shares also hit their 52-week high today, rising over 1.5 per cent to Rs 2,974, while Wipro shares neared their 52-week highs.
IT stocks have seen strong buying interest on defensive buying as Indian markets crumbled in the lead up to the Budget. These firms derive a majority of their earnings from the US and Europe so they are less impacted by domestic macro headwinds.
Meanwhile, global investment bank Credit Suisse has increased its target price on TCS and HCL Tech, India's largest and 4th largest IT exporter respectively.
Credit Suisse raised HCL Tech's target from Rs 860 to Rs 930 per share, while the target on TCS has been hiked from Rs 1,500 to Rs 1,760 per share. These two stocks are Credit Suisse's top picks in the IT space.
Consensus revisions and price earnings expansion will be the next drivers for these stocks, the investment bank said.
Overall for the IT sector, the demand outlook is ticking, Credit Suisse said.
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