Nifty IT Index Slips by Over 3% as US Fed Likely to Lower Pace of Rate Cuts

Mumbai, November 18, 2024: The Nifty IT index plummeted by over 3% in morning trade on Monday, driven by cautious sentiments following the US Federal Reserve's anticipated move to slow down its pace of interest rate cuts.

According to analysts' predictions, the US Fed is expected to ease the pressure on rates, which has resulted in a sell-off across the IT sector. The index has taken a sharp downturn, with several top IT stocks witnessing significant declines.

Among the most affected companies were TechM (down 5.5%), Infosys (down 4.2%), Wipro (down 3.6%), Tata Consultancy Services (TCS) (down 3.1%), and HCL Technologies (down 2.8%). Shares of IT firms in the Nifty 100 index also bore the brunt, with Cognizant, Cytech, and Syntech falling sharply.

"We're witnessing intense selling pressure as the US Federal Reserve's announcement has raised concerns about a possible reversal in its dovish stance," said a leading analyst. "As a result, investors are taking a cautious approach, opting to unwind their exposure to IT stocks."

The decline of the Nifty IT index has sparked worries that India's IT exports might suffer as a fall-out from slowing global demand.

However, other industry players remain optimistic about the country's robust IT sector, citing factors such as increased investments in emerging technologies like AI and digital transformation.

"The Indian IT industry has performed admirably despite the challenges posed by global economic uncertainties," said another analyst. "There are still many growth drivers in place, such as digitization across industries, which can help drive demand for IT services."

Investors have been tracking the US Federal Reserve's statements carefully for any signs of a potential pivot on rates, while also monitoring developments in trade policies and the US-China conflict.

As of 12:50 IST, the Nifty IT index is down by over 3%. Please stay tuned for further updates.