NSE Nifty IT rebounded in early trade on Thursday after the US Federal Reserve cut interest rate by 50 basis points and took a dovish stance. LTIMindtree Ltd. and Infosys Ltd. contributed the most to gains in the index.
The NSE Nifty IT index rose as much as 1.81% to 42,850.45 in early trade. However, the index erased gains from morning to trade 0.21% lower at 42,001.25 as of 12:41 p.m.
On Wednesday, the index declined as much as 3.69% to 41,814.40, marking the lowest level since September 9 as Infosys Ltd., Tata Consultancy Services Ltd. dragged it down.
The US Federal Open Market Committee (FOMC) voted in a 11–1 majority to bring down the benchmark rates by 50 basis points to 4.75–5.00%. The quantum of the rate cut is in line with market expectations.
Indian IT companies have large clients in the world's largest economy, hence, any economic shift in the US impacts these companies' outlook.
Also Read: US Fed Rate Cut Highlights: Jerome Powell Goes For A 50 Bps Cut With 'Flexible Future' Talk
LTIMindtree Ltd. rose as much as 3.28% to Rs 6,574.95 apiece during the trade.
Persistent Systems Ltd. and Coforge Ltd. were also among the gainers. Persistent Systems rose as much as 3.53% and Coforge Ltd. rose 3.24%.
Mphasis Ltd. and HCL Technologies Ltd. declined the most. HCL Technologies Ltd. fell 1.16% to Rs 1,776.20, as Kotak Institutional Securities downgraded the stock to 'reduce' on lesser ideal visibility of growth.
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