Nifty IT crosses 45,000 for the first time; HCL and four others peaked at 52 weeks

Indian IT stocks continued their winning streak for the fifth straight session on Thursday, December 5, boosted by Fed Chairman Jerome Powell’s comments at the New York Times DealBook Summit where he highlighted the resilience of the US economy, which is 60 -70 per share contributes cents of revenue for IT companies.

Riding on this sentiment, the Nifty IT index rose 2.4 percent in intraday trade, crossing the 45,000-point mark for the first time and hitting a new all-time high of 45,027, surpassing the previous high of 44,330 points of was surpassed at the end of November. The index closed the session at a record high of 44,806 points, a gain of 1.95 percent.

All ten components of the index ended the session on positive territory, with TCS leading the pack with a gain of 2.5 percent, followed by Infosys, LTIMindtree, Wipro and four other stocks, which ended the session with gains between 1 percent and 2.4 percent. cents, respectively.

Notably, five stocks including Wipro, Tech Mahindra, Persistent Systems, HCL Technologies and Coforge hit fresh 52-week highs during the session.

Tech index surpasses Nifty 50

Today’s rally pushed the Nifty IT index to an annual gain of 26.16 per cent, surpassing the 13.70 per cent gain seen in the Nifty 50s.

Powell described the US economy as “in remarkably good shape” and noted that downside risks in the labor market had diminished. While he refrained from providing specific guidance on the short-term path for interest rates, Powell emphasized that the Fed could afford to take a cautious approach.

Powell’s comments did little to change the expectation implied by market prices that the Fed will cut rates again at its meeting later this month. According to the CME FedWatch Tool, there is now a 74 percent chance of a 25 basis point rate cut, while the chance of rates remaining unchanged is estimated at 26 percent.

However, concerns remain about the potential impact of newly elected President Donald Trump’s policies on future Fed decisions. His proposals for cuts to corporate taxes and tariffs on trading partners could fuel inflation and widen the budget deficit, potentially complicating the Fed’s path for further rate cuts.

During Donald Trump’s first term, from January 2017 to January 2021, Indian IT stocks witnessed a significant rally. The Nifty IT index delivered a remarkable return of 150 percent, significantly better than the broader Nifty 50, which rose 60 percent during the same period.

Meanwhile, private wage growth was weaker than expected in November, pointing to a slowdown in the labor market, according to a report released by ADP on Wednesday. Companies added 146,000 jobs during the month, which is lower than the Dow Jones estimate of 163,000 and below October’s downwardly revised figure of 184,000.

Attention now shifts to the November nonfarm payrolls report, due Friday, as markets assess the likelihood of a rate cut in December. Markets are closely watching the report to gauge the likelihood of a possible rate cut by the Federal Reserve in December.

(With input from agencies)

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