Nifty IT Index Surges as Global Rate-Cut Hopes Improve

The Indian IT sector opened the week with renewed optimism as the Nifty IT index climbed 1.65% to 37,492.35 in Monday’s morning session. The gains were supported by a sharp rise in US Federal Reserve rate-cut expectations and a noticeable improvement in sentiment across technology stocks.
Investors quickly factored in the possibility of easier monetary conditions in the US, giving IT companies a strong boost at the market open.

The upward move also helped push four of the top six Nifty 50 gainers into the technology category, highlighting the sector’s dominant influence on the broader index today.

At around 09:40 IST, the benchmark NSE Nifty 50 and BSE Sensex were marginally higher, reflecting a calm but positive broader market mood.

Tech Mahindra, Infosys, and HCLTech Drive Index Gains

Among individual stocks, Tech Mahindra led the rally, surging 2.98% to Rs 1,505. The strong buying interest signalled investor confidence in the company’s improving deal pipeline and potential upside from global tech spending revival.

Infosys followed with a rise of 2.3% to Rs 1,580.5, continuing its recent positive trend.
HCLTech added 1.83%, reaching Rs 1,637.5, while TCS gained 0.5% to Rs 3,166.5.

Other Nifty gainers outside the IT pack included InterGlobe Aviation and Hindalco, further showing that favourable cues were not limited to a single sector.

US Fed Rate-Cut Expectations Trigger Buying in IT Stocks

The biggest catalyst behind Monday’s IT rally was the sudden rise in expectations of a US Federal Reserve rate cut in December. As per CME’s FedWatch Tool, the probability of a rate cut has surged to 70%, up sharply from 44% just a week earlier.

This shift is crucial for the Indian IT industry because:

• Lower US interest rates typically boost American technology spending,

• Stronger US demand benefits Indian IT service providers,

• Emerging markets like India are becoming more attractive for foreign investments,

• IT companies see higher valuation comfort when global borrowing costs ease.

The result was a swift, sentiment-driven rotation into IT stocks, with investors positioning themselves for potential improvements in global tech demand.

Market participants believe a rate cut could revive enterprise tech budgets, digital transformation programs, and outsourcing deals—all key revenue streams for Indian IT companies.

Brokerage Commentary Strengthens Market Sentiment

Supporting the global cues was strong commentary from financial brokerages.
Motilal Oswal Financial Services stated that the long-discussed AI services cycle may finally be nearing an inflection point, similar to the cloud investment boom observed between 2016 and 2018.

The brokerage believes that with AI compute and infrastructure layers now largely in place, companies are likely to increase incremental spending on AI-based services and modernization projects. This trend could directly benefit leading Indian IT companies.

Motilal Oswal also stated that the IT sector appears to be at its bottom, with risks now skewed towards the upside.
It expects the recovery to become meaningful in the second half of FY27 and to gather full momentum in FY28.

Reflecting its improved outlook, the brokerage:

• Upgraded Infosys, Mphasis, and Zensar to “Buy”,

• Revised Wipro to “Neutral.”

This wave of upgrades further lifted sentiment and contributed to the strong buying momentum in IT counters.

Conclusion: A Sign of Early Stability for IT?

The 1.6% rise in the Nifty IT index shows that the sector is beginning to attract renewed attention after months of cautious investor behaviour.
Stronger US Fed rate-cut expectations have offered IT stocks a clear short-term trigger, while supportive commentary from brokerages has strengthened the medium-term outlook.

With Tech Mahindra, Infosys, HCLTech, and TCS leading the morning gains, the sentiment around the sector has temporarily shifted to optimism.
Whether the momentum sustains will depend on how global interest-rate expectations evolve and how soon IT spending begins to recover.

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