TCS, Infosys, other IT stocks rise after US Fed chair Jerome Powell hints at rate cut in September during Jackson Hole speech

IT stocks were in focus on Monday with some shares soaring over 4%, after US Federal Reserve Chair Jerome Powell hinted at a rate cut during his speech at the annual symposium in Jackson Hole, Wyoming, late on Friday.

During the speech, Powell said that the slowdown in labour force growth in the US, along with the risk of inflation, may warrant adjusting its policy stance.

The Federal Open Market Committee (FOMC) will meet from September 16 to 17 to discuss its monetary policy stance. The current Federal Funds Target Rate stands in the range of 4.25% to 4.50%.

Indian IT companies derive a major portion of their revenue from the US market; thus, a rate cut would support economic growth and aid in the revival of client spending, bolstering the sector.

The NIFTY IT gauge was trading 2.75% or 972.90 points higher at 36,413.75, bolstered by buying in Mphasis, Infosys, TCS, Oracle, and other IT shares.

Shares of Mphasis advanced as much as 4.18% to an intra-day high of ₹2,967.60 apiece on the National Stock Exchange (NSE). At around 12:59 pm, the scrip was trading in the green at ₹2,921.50 (+2.56%).

Furthermore, the Infosys stock soared 3.36% to the session’s peak of ₹1,537.50 per equity share.

While Oracle Financial Services shares surged 3.57% to the session’s high of ₹8,932, the Wipro scrip was trading at a high of ₹257.29, up 3.47%.

HCL Technologies and Persistent Systems stocks were trading higher by 2.84% and 2.61%, respectively.

Shares of LTIMindtree advanced as much as 2.4% and those of Coforge 2.85% during the day’s trade on Monday.

The rally in information technology stocks led to Indian equity benchmarks extending gains, with NIFTY50 at 24,996, up 125.90 points or 0.51%.