Except for a brief period of reversal from the final week of September 2022 to the end of November 2022, Infosys stock has been on a downward trend for the past year. Today’s opening gap on the upside continued as the price of Infosys shares dropped to an intraday low of Rs. 1,382.90 a share, only 2% above their 52-week low of $1,355 per share on the NSE.
Experts in the stock market claim that Indian IT equities, particularly large-cap leaders like Infosys, are seeing a sell-off after the eruption of a series of bank crises in the US and the collapse of Credit Suisse in Europe. They claimed that Indian-based IT companies are anticipated to experience significant business losses in the ensuing quarters as a result of the US financial crisis. Thus, the stock may decline further in the short to medium term reaching levels of $1,240 even though its current 52-week low appears weak. According to them, the Nifty IT index is also appearing sideways to weak because it is currently below 28,000 and may continue to decline towards 26,200, which were its previous lower levels.
Ravi Singhal, CEO of GCL Broking, commented on the cause of the decline in Infosys shares, “Following the war between Russia and Ukraine, IT stocks have been under pressure for more than a year. Because of the bank crisis in the US following the SVB collapse, 40 to 50 percent of the BFSI business of Indian IT companies in the US will be negatively impacted, even though IT shares are already at discounted levels. Therefore, while the major IT companies in India might post better results in Q4FY23, they might not be able to maintain their higher bottleneck in the following quarters of FY24, and as a result, the market has already begun discounting that decline in their US revenue.”
The CEO of GCL Broking, Ravi Singhal, commented on the cause of the decline in Infosys shares by stating, “Since the Russia-Ukraine war, IT equities have been under pressure for more than a year. Because of the bank crisis in the US following the SVB collapse, 40 to 50 percent of the BFSI business of Indian IT businesses in the US will be affected, therefore even though IT shares are already at discounted levels, more downside cannot be ruled out. So, although large Indian IT companies might post better results in Q4FY23, it’s possible that they won’t be able to maintain their higher bottleneck in the following quarters of FY24, which is why the market has already begun to discount that decline in US revenue.”
He encouraged Infosys shareholders to keep their stop loss below the company’s current 52-week low and to sell their shares if they rose, as the stock may soon reach levels of $1,450 per share if its current 52-week low is maintained.
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