Nifty IT crosses 45,000 for first time; HCL and four others hit 52-week highs | Stock Market News

Indian IT stocks continued their winning streak for the fifth straight session on Thursday, December 5, boosted by Federal Reserve Chair Jerome Powell’s remarks at the New York Times DealBook Summit, where he emphasised the resilience of the US economy, which contributes 60-70 per cent of revenue for IT companies.

Riding on this sentiment, the Nifty IT index surged 2.4 per cent in intraday trade, crossing the 45,000 mark for the first time to hit a fresh all-time high of 45,027, surpassing its previous record of 44,330 points set in late November. The index ended the session at a record closing high of 44,806 points, gaining 1.95 per cent.

All 10 constituents of the index ended the session in positive territory, with TCS leading the pack, gaining 2.5 per cent, followed by Infosys, LTIMindtree, Wipro, and four other stocks, which ended the session with gains between 1 per cent and 2.4 per cent, respectively.

Notably, five stocks, including Wipro, Tech Mahindra, Persistent Systems, HCL Technologies, and Coforge, reached new 52-week highs during the session. 

Tech index outpaces Nifty 50

Today’s rally pushed the Nifty IT index to a year-to-date gain of 26.16 per cent, surpassing the Nifty 50’s increase of 13.70 per cent.

Powell described the US economy as being ‘in remarkably good shape’ and noted that downside risks from the labour market had receded. While he refrained from offering specific guidance on the near-term path for interest rates, Powell emphasised that the Fed could afford to adopt a cautious approach.

Powell’s comments did little to alter expectations implied by market pricing that the Fed will cut rates again when it meets later this month. According to the CME FedWatch Tool, there is now a 74 per cent probability of a 25-basis-point rate cut, while the chance of rates remaining unchanged is seen at 26 per cent.

However, concerns persist about the potential impact of President-elect Donald Trump’s policies on future Fed decisions. His proposals for corporate tax cuts and tariffs on trading partners could stoke inflation and widen the fiscal deficit, potentially complicating the Fed’s path for further rate cuts.

During Donald Trump’s first term in office, from January 2017 to January 2021, Indian IT stocks experienced a substantial rally. The Nifty IT index delivered a remarkable return of 150 per cent, significantly outpacing the broader Nifty 50, which gained 60 per cent over the same period.

Meanwhile, private payroll growth in November came in weaker than expected, signalling a slowdown in the labour market, according to a report released by ADP on Wednesday. Companies added 146,000 jobs during the month, falling short of the Dow Jones estimate of 163,000 and down from October’s downwardly revised figure of 184,000.

Attention now shifts to the November nonfarm payroll report, scheduled for release on Friday, as markets assess the likelihood of a December rate cut. Markets are closely watching the report to gauge the likelihood of a potential December rate cut by the Federal Reserve.

(With inputs from agencies)

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