Infosys, Wipro to LTIMindtree: IT stocks extend rally to 3rd day amid US Fed rate cut cheer

IT stocks jumped up to 3% in intraday deals on Thursday, September 18, pushing the Nifty IT index higher for the third day, after a rate cut by the US Federal Reserve overnight boosted investor sentiment. During the three-day rally, the Nifty IT pack has jumped over 3%.

In trade today, LTIMindtree shares emerged as the top index gainer, rising as much as 3.61% to the day's peak of ₹5,619. It was followed by Infosys and Wipro, rising 2% each to the day's high of ₹1,555 and ₹259.80, respectively.

Mphasis, Coforge, and HCL Tech added 1% each. Meanwhile, other IT stocks like TCS, Tech Mahindra, OFSS and Persistent Systems also traded in the green.

The rally comes amid a 25 basis point rate cut by the US Fed for the first time this year in order to address the weakness emerging in the labour market.

However, Fed chairman Jerome Powell tempered the expectations of a more aggressive easing as he said that last night's move was a risk-management cut and that the central bank does not need to move quickly on rates.

A lower US interest rate makes emerging markets like India attractive for foreign portfolio investors. Meanwhile, it also drives an increase in the discretionary spending limit in the US, which is beneficial for IT companies, as they earn a major chunk of their revenue from the US.

More to come…

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