TCS, Wipro, IT stocks to be in the spotlight today, and they have a headwind to counter

Indian IT companies, Tata Consultancy Services Ltd., Wipro

Ltd. and their peers, will be in the spotlight on Friday, April 10, not just for newsflow related to the two companies mentioned earlier, but also due to the rub-off effect of these announcements on the entire sector and due the recent developments on Wall Street as well.

While TCS reported its quarterly results on Thursday after market closing hours, which were in-line with expectations, Wipro announced that it will be considering a buyback of equity shares for the first time in nearly three years, along with its board meeting on April 16, which is when it will also announce its results for the quarter.

Shares of Indian IT companies, Infosys and Wipro, that are listed on the US bourses, saw a muted response to both the announcements. Infosys ADRs ended with losses of over 1.5% overnight, Wipro ended little changed, having recovered from the lows of the day. The stock was up around 2% in extended trading.

The Headwind

Indian IT companies took a beating in February due to AI related concerns and launches made by US-based Anthropic. Stocks fell between 15% to 20% that month, before seeing a recovery in the recent trading sessions.

However, software-linked stocks sold-off again on Wall Street on Thursday, despite the market ending the session with healthy gains.

Shares of Oracle Corp., ServiceNow Inc., Salesforce Inc., Adobe Inc., and others, fell between 4% to as much as 8% in overnight trading.

The recent sell-off came as a result of the new launch made by Anthropic that is not for public use just yet, Along with Anthropic, Meta Platforms also launched a new AI model of its own.

The Nifty IT index has gained 9% so far this month, with Midcap IT outperforming its largecap peers. Shares of Mphasis, LTIMindtree, Coforge, and Persistent Systems have gained between 12% to 16%, while largecap names like TCS, HCLTech and Wipro have gained between 9% to 10% so far in April.