Infosys, Wipro, Mphasis Lead IT Stock Rally as Fed’s Dovish Tone Sparks Optimism

Indian IT stocks saw strong gains on Wednesday as investors reacted positively to signals from the US Federal Reserve about possible interest rate cuts.

Infosys share price surged nearly 3% to ₹1,649, while Wipro share price rose 2%. Mphasis and TCS also climbed over 1.5%. Out of 10 companies in the Nifty IT index, 9 traded higher, pushing the index up 1.8% to a day’s high of 39,519.

This rally adds to the sector’s recent momentum. In June, the index had gained 4.36%, following a 4.30% rise in May.

Why Are Tech Stocks Rising?

The surge came after Fed Chair Jerome Powell, speaking at a central banking conference in Portugal, said the Fed would wait for more economic data before lowering rates but did not rule out a rate cut in July.

When asked whether a July cut was possible, Powell said it was too early to confirm but left the door open. He also mentioned that earlier action on rates might have happened if not for inflation driven by past trade tariffs.

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Market Reactions

Former President Donald Trump recently sent Powell a list comparing US rates to lower rates in other countries, criticising him for being “too late.”

This political backdrop, combined with expectations of easier monetary policy, boosted investor confidence in rate-sensitive sectors like IT, which earns a large share of revenue in dollars.

Conclusion

Overall, the Fed’s cautious but softer stance has reassured investors hoping for rate cuts soon, driving strong buying in Indian IT stocks. With the Nifty IT index extending its rally into a third month, the sector could continue to attract interest if global rates move lower in the coming quarters.

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