NIFTY IT INDEX PLUMMETS OVER 3% AS US FED EXPECTED TO SLOW DOWN RATE CUTS

In a significant move, the Nifty IT index slipped by over 3 per cent in the mid-afternoon trades on November 18, 2024, amidst expectations of a slowdown in rate cuts by the US Federal Reserve.

The US Fed's latest monetary policy decision is expected to have a ripple effect on global markets, leading to the sell-off in the IT sector. The benchmark Nifty 50 index had opened at 17,943 levels, with IT stocks leading the decline and many other counters also witnessing selling pressure.

According to market analysts, the US Fed's decision was seen as a positive for bonds and equity markets worldwide, pushing yields lower and boosting investor sentiment. However, investors were spooked by news that the Fed is expected to slow down its pace of interest rate cuts ahead of the November meeting.

Shares in top IT majors such as Infosys (down 2.5 per cent) and Tech Mahindra (down 4.1 per cent), TCS (down 0.8 per cent), HCL Technologies (down 3.9 per cent) saw significant selling pressure in mid-afternoon trades.

The sell-off was also attributed to the impact of weak earnings from US IT companies in the third quarter, and a decline in currency against the dollar which impacted exports of Indian IT players in the global market.

The recent sell-offs in global markets has led to investors questioning if the cyclical bull show is over for the sector that contributed significantly to India's GDP growth during the past four decades.