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After a brutal two-day selloff that saw Infosys and Wipro ADRs plunge as much as 14.5%, Friday’s session brought a much-needed breather. Bargain hunting kicked in at lower levels, sparking a sharp rebound as Infosys climbed 4% while Wipro gained 3%—helping both stocks close the week on a far stronger note.

As much as Rs 5.7 lakh crore evaporated from the sector in just eight trading sessions and the Nifty IT index crashed 19% in the short span. The selloff wasn’t restricted to the two, IT bellwether plunged to its over 5-year low on Friday. Coforge, LTIMindtree, HCL Tech, and Mphasis also slipped up to 4%.

The bearish sentiment stemmed from US artificial intelligence startup Anthropic, which unveiled a new tool designed specifically for corporate legal teams earlier this month. Anthropic, the company behind the Claude chatbot, said the product is capable of automating several legal functions, including contract reviews, non-disclosure agreement triage, compliance workflows, legal brief preparation and standardised responses.

Rally on the cards on Monday?

International brokerage firm JP Morgan has a message for panic-stricken investors: IT services firms are the indispensable “plumbers of the tech world” and their dividend yields have now hit levels last seen only during the global financial crisis and COVID-19.

As Rs 5.7 lakh crore evaporates from the sector in just eight trading sessions and the Nifty IT index crashes 19% in the short span, the Wall Street giant is turning contrarian, declaring “deep value” buying opportunities in bloodied bellwethers Infosys and TCS.
While AI tools like Claude Cowork spark fears of wholesale disruption, JP Morgan argues someone still needs to make enterprise software actually work and that’s where Indian IT services remain irreplaceable.”Free cash flow/dividend yields scream deep value and are crossing levels prior seen during market dislocation events such as GFC and COVID,” the analysts wrote, recommending a “barbell approach to buy deep value in large caps” with overweight ratings on Infosys and TCS, alongside growth champions Persistent Systems and Sagility.

With the sector trading at valuations previously seen only during major market crises, JP Morgan’s scenario analysis suggests limited further downside even in bear cases, while any marginal recovery in growth could drive significant upside.

“I am of the view that the things are not looking as bad as it is sounding. On the contrary, for most of the IT companies, it is a new birth, new business, new environment in which they will probably be flourishing in coming times,” said Deven Choksey, MD, DRChoksey FinServ to ET Now.

He added that Indian IT companies have positioned themselves strongly for this new operating model. Earlier, most firms billed clients on a time-and-cost basis, but the shift today is toward outcome-based pricing—and clients are increasingly willing to pay for measurable results. This change has been driven largely by the adoption of AI, which is helping companies save time, reduce costs, and deliver solutions faster. If agility-based development defined the previous phase, AI-led development is quickly becoming the new norm. As firms move from time-linked billing to outcome-driven revenue models, many Indian IT players are likely to secure larger and more strategic deals, especially as the business environment continues to evolve at a rapid pace.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)

Veteran investor Howard Marks has long argued that successful investing is less about predicting exact turning points and more about understanding where markets stand in the broader cycle. His core message in his book, “Mastering the Market Cycle” has taken on renewed importance in today’s complex and fast-changing market environment, where optimism around technology, selective global growth, and India’s structural story coexist with rising valuations and pockets of excess.

In the current phase, global equities, particularly in the US, are trading at elevated valuations, while themes such as artificial intelligence and select technology leaders continue to attract heavy investor interest. At the same time, central banks are navigating the final stages of a tight monetary cycle, and geopolitical risks remain elevated.

His emphasis on calibrating risk rather than making binary bullish or bearish calls becomes especially relevant in such an environment. Instead of being fully aggressive or fully defensive, the philosophy encourages investors to gradually adjust portfolio positioning based on signals from valuations, investor behaviour, credit conditions, and market psychology.

While markets may not yet be in outright bubble territory, they are increasingly vulnerable to disappointment if growth expectations fail to match lofty prices, according to Howard Marks’ recent remarks. The strong concentration of returns in a narrow set of global technology stocks, combined with investor willingness to pay up for long-term narratives, reflects a phase of the cycle where optimism is high, even if not euphoric.

For Indian investors, this framework offers a useful perspective. Domestic equities continue to benefit from structural growth drivers such as capex, manufacturing, and consumption, but selective stock picking and valuation discipline are becoming more critical. Broad-based easy gains are harder to come by in a market where quality growth is already well priced.

Marks has also consistently highlighted the role of investor psychology in driving market swings far beyond what fundamentals alone would justify. Periods of sustained optimism tend to reduce perceived risk, leading to aggressive positioning, while corrections often create opportunities precisely when sentiment is weakest.
Cycles are shaped as much by human behaviour as by economic data is the enduring lesson. Investors who remain aware of this, trimming risk when enthusiasm is widespread and being prepared to add exposure during periods of fear, improve their odds over time.

In today’s environment, where AI optimism, global liquidity shifts, and valuation concerns intersect, Marks’ philosophy serves as a reminder that mastering the market cycle is less about bold forecasts and more about thoughtful positioning, patience, and respect for risk.

Gold and silver futures rebounded on bargain-hunting after weaker-than-expected U.S. inflation data reignited hopes for Federal Reserve rate cuts this year, offsetting concerns from stronger-than-expected jobs data earlier in the week.

On Friday, MCX silver futures for March 5, 2026 rose 3.62%, up Rs 8,564 to Rs 2,44,999 per kg. Gold futures for April also edged higher by Rs 305, or 0.2%, to Rs 1,56,200 per 10 grams.

In international commodity markets, precious metals rebounded sharply after the previous session’s selloff, with spot silver rising 2.1% to $77.27 per ounce, recovering from an 11% plunge a day earlier. Spot gold also advanced 2.33% to $5,063 and is now up more than 1% for the week. The recovery comes after bullion dropped nearly 3% on Thursday, slipping to its lowest level in almost a week.

The U.S. Consumer Price Index rose 0.2% in January, below economists’ expectations of a 0.3% increase, following an unrevised 0.3% gain in December, the Labor Department said.

Gold, silver levels for Monday

MCX Gold continues to exhibit structural resilience despite global consolidation, supported by relative firmness in USD/INR. The Rs 1,50,000 support band remains a strong demand absorption zone, attracting both physical buying and investment flows, reinforcing the integrity of the medium-term rising channel.
“Price behavior at lower levels indicates accumulation rather than distribution. A sustained move above Rs 1,60,000 would likely re-ignite bullish momentum toward Rs 1,65,000–Rs 1,70,000+, while meaningful downside risk remains limited unless COMEX gold breaches its structural support clusters decisively,” Ponmudi R, CEO of Enrich Money said. MCX Silver continues to build a durable base within the Rs 2,33,000–Rs 2,35,000 structural support zone. Price action reflects gradual absorption, with downside momentum notably weaker compared to the prior week’s volatility spike. Volatility compression at these levels signals accumulation rather than liquidation.

A decisive breakout above Rs 2,65,000 would likely attract momentum participation, targeting Rs 2,80,000+ in the medium term, supported by tightening global supply dynamics and steady industrial offtake.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)