Domestic tech stocks, which had been under pressure in recent sessions, saw a strong reversal in sentiment during Wednesday’s trade, as all 10 constituents of the Nifty IT index ended with solid gains, lifting the index by 2.70%, its biggest single day jump since May 2025.
Infosys led the pack, rising 4% to ₹1,497, followed by Coforge and MphasiS, which gained 3.3% and 3.2%, respectively. Other stocks, including TCS, Persistent Systems, Tech Mahindra, Oracle Financial Services, Wipro, LTIMindtree, and HCL Technologies, also ended higher with gains ranging between 1.5% and 3%.
The robust rally in tech stocks can be attributed to multiple factors, as the sustained sell-off in the recent weeks has brought valuations down to more comfortable levels, prompting investors to take a fresh look at the sector despite weak demand outlook.
In addition, growing expectations that the US Federal Reserve might resume its rate-cutting cycle from the next policy meeting have further boosted sentiment.
Investors will be watching for cues on rate cuts from Powell’s upcoming speech, which is seen as the market’s main event, as traders look for any pushback against expectations of a rate cut at the Fed’s September 16–17 meeting.
Currently, traders are pricing in about an 85% chance of a quarter-point cut next month and expect around 54 basis points of reductions by year-end.
Just a couple of weeks ago, when the latest jobs report revealed a slump in hiring, the case for lower rates looked almost certain. However, a sharp spike in US wholesale prices—the steepest in three years—renewed concerns about tariff-driven inflation, which has so far kept Fed officials cautious this year.
Powell has stated he is reluctant to cut rates due to anticipated price pressures from tariffs this summer. Meanwhile, President Donald Trump reiterated his criticism of Powell, saying the Fed chair is hurting the housing industry by not lowering rates. “There is no inflation, and every sign is pointing to a major rate cut,” Trump posted on Truth Social.
Later in the day, the Fed will also release the minutes of its July 29–30 meeting, when rates were held steady, though they may offer limited insight as the meeting preceded the weak jobs data.
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