Indian IT stocks are back in the spotlight. On June 27, the Nifty IT index rose sharply, tracking a strong rally in US markets. The big driver? Hopes of an early Fed rate cut—a move that could boost US consumer spending and benefit Indian tech companies that earn a large share of revenue from America.
What’s Driving the Buzz?
Wall Street is riding high. The Nasdaq 100 Index just hit a record close for the first time since February and is up 30% since its April lows. That’s big. It’s also beating the broader S&P 500 by a mile.
Investors are betting that the US Federal Reserve might cut rates sooner than expected. A recent ceasefire between Iran and Israel has eased global tensions. Meanwhile, political chatter in the US is heating up. There are even rumors of President Trump considering replacing Jerome Powell with someone more “rate-cut friendly.”
Trump, who has often clashed with Powell, argues that interest rates are too high and are hurting the US economy. Lower rates would mean more cash in Americans’ hands—good news for Indian IT firms that provide tech services to US clients.
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Coforge Leads the Charge
Among Indian IT names, Coforge jumped over 3%, trading at ₹1,948. Mphasis followed, up 2.5% at ₹2,872. Persistent Systems and HCL Tech also saw nearly 1% gains. The big boys—Infosys, TCS, Tech Mahindra, LTI Mindtree, and Wipro—were also in the green, though with smaller gains.
This comes after months of pain. The Nifty IT index had crashed more than 30% from December 2024 to March 2025 due to global uncertainty and tariff worries. But since hitting its low, the index has bounced back by 27%, driven by renewed buying interest.
“In the IT space, the recovery seems more technical and valuation-led,” said Bhavika Joshi, Business Head at INVasset PMS. “Investors are bottom-fishing in large-cap names offering global exposure and solid cash flows.”
What a Fed Rate Cut Means for Indian IT
A Fed rate cut can be a game-changer. It boosts spending and business activity in the US. That often leads to more tech outsourcing—a direct win for Indian IT firms.
As global investors grow optimistic, especially around AI and tech themes, Indian companies with strong US exposure stand to benefit. It’s not just a technical rebound—it’s about timing, sentiment, and storytelling.
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