Indian IT stocks surged in Thursday’s trading session, driven by positive signals from global markets after the US Federal Reserve maintained interest rates unchanged for the fifth consecutive meeting at its two-day March policy meeting, concluding on Wednesday. The Fed’s decision to retain its projection of three rate hikes by the end of 2024, as indicated in the “dot plot,” further boosted market sentiment.
In addition to the rate decision, Federal Reserve policymakers upgraded their economic forecasts, notably revising the US growth outlook for this year to 2.1%, up from the previously forecasted 1.4% in December.
The Federal Reserve is presently maintaining interest rates at their highest level in over two decades, aiming to gradually restore inflation to the targeted 2% rate over the long term. Since March 2022, the US central bank has raised its policy rate by 525 basis points to the current range of 5.25% to 5.50%.
Following the upbeat remarks from the US Federal Reserve, major equity markets worldwide closed Wednesday’s session with gains. This positive momentum extended to Asia, where all major indices opened Thursday’s session in positive territory. The Nifty 50 commenced the session with a gap up at 21,989 points, reaching an intraday high of 22,025 points.
Indian IT companies, which heavily rely on US markets, also witnessed gains, with the Nifty IT index breaking a four-day losing streak in today’s session, surging by 1.53% to reach an intraday high of 36,296 points.
Among individual stocks in the index, L&T Technology Services led with a gain of 2.6%, followed by Coforge, Persistent Systems, MphasiS, Wipro, HCL Technologies, LTIMindtree, Tech Mahindra, Infosys, and TCS, all trading with gains ranging between 0.5% and 1.5%, respectively.
Commenting on the Fed’s decision, Dr. V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, stated, “The uncertainty regarding the Fed decision is over with the Fed keeping the rates unchanged and refraining from a hawkish message.” He further added that the favorable global market sentiment would likely have a positive impact on Indian markets, particularly in large-cap sectors such as banking, telecom, capital goods, and automobiles.
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