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IT stocks fell up to 3% after Infosys raised entry-level salaries, pushing the Nifty IT index down 0.86%. Analysts suggest the salary hike reflects competition for digital talent but may not significantly impact sector valuations. The focus remains on global demand, earnings outlook, and talent costs. Coforge shares dropped over 3% amid acquisition talks, while other major IT stocks saw declines. Infosys, Wipro, and Persistent Systems showed marginal gains.
Infosys is integrating AI into its operations, creating new business opportunities as clients seek AI-driven solutions. The company is set to benefit from growth in AI offerings.12BNP Paribas analyst Kumar Rakesh noted that new H-1B visa changes will have little effect on Infosys, as its reliance on the visa system has greatly reduced.3
The Nifty 50 Index rose near its record high following the Reserve Bank of India's (RBI) "shock-and-awe" strategy to boost liquidity. The RBI plans to buy $22 billion in bonds and conduct a $10 billion forex swap. This move aims to offset recent cash drains. The index also reacted to a U.S. court ruling on H1-B visa fees and ongoing trade conflicts. Top gainers include Shriram Finance and Maruti Suzuki, while laggards include Tata Motors and Infosys. The index is expected to continue rising, targeting a resistance level of ₹26,400.
Market expert Deven Choksey views the Indian IT sector as a compelling investment due to AI adoption and business transformation. He highlights major IT firms like TCS and Infosys leading this shift, creating new business opportunities. Despite potential regulatory changes, Choksey sees sustainable growth, projecting higher single to mid-double digit revenue growth. Infosys and TCS are identified as well-placed for investors seeking to capitalize on AI-driven IT evolution.
On December 23, Eastern Time, Infosys options saw a total of 91087 contracts traded, with calls accounting for 70% and puts making up 29%.
