Wipro ADRs Slump 14% Even As Infosys Receipts Tick Higher

The American Depository Receipts (ADRs) of Wipro Ltd. fell 14% on Wednesday, even as the ADRs of rival Infosys Ltd. ticked higher. There was no immediate trigger for the slump, and the company's stock listed on Indian exchanges did not face a massive sell-off during the day's trade.

At 11:58 am EST, Wipro ADRs were trading 13.1% lower at $1.955 apiece in the US, whereas Infosys ADRs were trading 1.5% higher at $10.65.

Even as the Wipro ADRs were down, major software names on the Wall Street gained, with Accenture trading nearly 6% higher, Salesforce up 5.4%, IBM up 4.35%, and Cognizant rallied 7.14%.

The rally was likely driven by Guggenheim Securities dismissing the threat posed by artificial intelligence, saying there is no existential crisis before the tech sector. “Valuations imply many software companies will decline into perpetuity because of AI,” analyst John DiFucci stated in a note. “We don't believe that to be true.” AI firms would have some impact on their businesses, but considering them as death knell would be a "a hallucination.”

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Notably, Wipro ADRs have traded in a decoupled manner with the Dalal Street-listed stock. The receipts had risen over the past four trading days, even as the scrip in India stayed under pressure.

The IT sector continues to remain a drag on the Indian markets, even as the overall sentiment has improved due to the easing in West Asia tensions.

The Nifty IT index hit its lowest level since May 2021 on at 26,098 points as KPIT shares crahsed 16% after a weak first quarter warning. The index was down more than 32% in the last 12 months and 31% year to date, while its constituents including Tata Consultancy Services, Infosys and HCLTech traded in red. 

Wipro, however, saw limited downside. The stock rose 1.03% at one point to touch 172.15, but later retreated to end 0.32% lower at Rs 169.85 apiece on the NSE. In comparison, the benchmark Nifty 50 settled 0.59% higher.

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