Stock market today: After ease in the US recession fear and a dip in the US dollar price, the Nifty IT index witnessed a strong upside on Friday. The Nifty IT index outshined the frontline Indian indices and surged over 1,000 points or around 2.50 per cent to the 401,735 mark, which is enough to explain the kind of enthusiasm witnessed in the IT segment. Among IT majors, Mphasis shares led from the front by logging around a 6.60 per cent intraday rise. Shares of L&T Technology Services followed Mphasis with around 5.50 per cent intraday rally. Shares of Wipro, Tech Mahindra, and Coforge are also up by over 3 per cent.
According to stock market experts, the Nifty IT Index is rising for two reasons: ease in US recession fear and weakness in the US dollar rates. They said that better-than-expected US job data had fueled buzz for the US Fed rate cut in the September 2024 meeting of the US Central Bank. This US Fed rate cut buzz has put US Treasury yields and US dollar rates under pressure, which is good news for Indian IT companies. That's why Indian IT stocks are rising, and the Nifty IT index surged around 2.50 per cent during Friday deals. They advised medium- to long-term investors to hold their position with strict stop loss as the Nifty IT breach above 41,300 may fuel a fresh rally in the Indian IT pack.
On why Indian IT shares are rising today, Avinash Gorakshkar, Head of Research at Profitmart Securities, said, “Rise in the Indian IT shares can be attributed to two major reasons: easing fear of the US recession and selling pressure in the US dollar. After Thursday's strong US job data announcement, fear of the US recession has dampened, and talks of the US Fed rate cut have again renewed. This has put the US dollar and the US Treasury yields under pressure, and people are shifting money from the bond and currency market to other assets like equities, gold, etc.”
Speaking on the outlook for the Indian IT stocks in the near term, Ganesh Dongre, Senior Manager — Technical Research at Anand Rathi, said, "Bull trend in the Nifty IT Index was expected after the IndexIndex gave a technical breakout at 39,400 on Wednesday. The Index Index is facing a hurdle at the 41,250 to 41,300 mark. On breaching above this hurdle, we can expect a fresh rally in the Indian IT stocks. However, if it fails to breach this hurdle and breaks below the 39,400 mark, the Nifty IT index may reach the 38,000 mark.
Disclaimer: The views and recommendations above are those of individual analysts or broking companies, not Mint. We advise investors to check with certified experts before making any investment decisions.
