Stock market today: Despite the Indian stock market trading in the green in the early morning session on Friday, IT stocks remained in the bears’ grip. Indian IT major, TCS share price today opened with a downside gap at ₹2,177.20 per share on the NSE and touched an intraday low of ₹2,115.40 apiece, logging over 3% intraday loss. Similarly, HCL Tech share price lost around 2%, Tata Elxsi shares corrected by more than 2%, Route Mobile shares fell around 2.50%, and Tech Mahindra share price declined by around 2%.
Bank of Japan interest rate
According to stock market experts, the Bank of Japan’s interest rate hike is the primary reason IT stocks are diverging from the Indian stock market’s mood. They said that Bank of Japan news on rate hike is expected to put pressure on the US Treasury yields and the US Dollar (USD). They said that Indian IT companies deal in US dollars because they export IT services to the US and other countries. In the wake of a decline in the US Dollar, IT companies are expected to earn US Dollars in India, which will be worth less against the Indian National Rupee (INR).
Pointing towards the Bank of Japan interest rate hike, Anuj Gupta, a SEBI-registered market expert, said, “The IT stocks are under pressure today due to the Bank of Japan’s rate hike. The Bank of Japan’s rate-hike decision will put pressure on US bond yields and the US dollar. As the Indian IT companies earn in terms of US Dollars, their income is expected to go down, and this is a reason for a drag in the Indian IT stocks during Friday dealings.”
Opportunity for bottom fishing?
Looking at this dip in the Indian IT stocks as an opportunity for bottom fishing, Amit Goel, Chief Global Strategist at PACE 360, said, “The outlook for the Indian IT and tech segment is positive due to the AI-slowdown buzz. The recent dip in the Indian IT stocks can be short-lived as the Bank of Japan’s interest rate hike decision will have a short-term impact on the US Treasury yields and the US Dollar, as investors are waiting for more rise in the Bank of Japan interest rates.”
Bank of Japan interest rate news
The Bank of Japan raised interest rates to a 31-year high of 1.25% on Friday in a widely expected move to forestall the risk of inflation overshooting its 2% target.
At a two-day policy meeting that ended on Friday, the board decided by a 7-2 vote to raise its policy rate from 1%. Board member Toichiro Asada and Ayano Sato dissented from the decision.
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