News

Indian IT stocks stayed in focus for the third session in a row on Friday, December 19, as a softer US inflation print and upbeat quarterly numbers from Accenture lent support to sentiment, even as caution over demand visibility capped sharp upside.

The Nifty IT index rose over 1 per cent in early trade to touch an intraday high of 39,054.35, before giving up part of the gains.

Buying interest in IT counters was underpinned by signs of cooling inflation in the US, raising hopes of further rate cuts by the Federal Reserve. Data showed US consumer prices rose 2.7 per cent year-on-year in November, easing from 3 per cent in the 12 months through September. The softer print revived expectations of monetary easing, which typically supports emerging market equities by lowering bond yields and the dollar.

For Indian IT companies, lower US interest rates are also seen as positive, as they tend to improve discretionary technology spending in their largest market, North America.

Sentiment was further buoyed after Accenture reported better-than-expected first-quarter results, driven by strong demand for artificial intelligence-led solutions. The IT consulting major posted revenue of $18.74 billion, ahead of Street estimates of $18.52 billion, while new bookings rose 12 per cent to $20.9 billion.

In its post-earnings interaction, Accenture’s management indicated that the pace of overall and discretionary client spending remained broadly in line with last year, easing some near-term concerns around demand slowdown.

However, gains in Indian IT stocks were tempered by a guarded outlook from brokerages. Jefferies warned of downside risks after Accenture guided for 1.5–4.5 per cent organic growth in FY26. The brokerage pointed out that while GenAI-related deal activity is improving, discretionary spending remains tight. It also noted that the absence of an upward revision to full-year guidance after a strong first quarter has, in the past, been a precursor to earnings downgrades.

Jefferies reiterated its selective stance on the sector, citing limited room for valuation expansion.

On the stock-specific front, Persistent Systems, Tata Consultancy Services (TCS), Tech Mahindra, Infosys, Wipro and Mphasis were trading in the green with modest gains in the afternoon after rising up to 1 per cent earlier in the session. Meanwhile, Coforge, LTI Mindtree and HCL Technologies slipped up to 1 per cent, reflecting stock-specific profit-taking.

Overall, IT stocks continued to draw support from global cues, but analysts said sustained upside would hinge on clearer signs of recovery in discretionary tech spending.