Fed rate cut hopes fuel IT stocks' rally
Infosys just announced a board meeting to discuss a share buyback, sending its stock up 3.4%.
The excitement spread across the sector, with the Nifty IT index jumping 2.3% as Tech Mahindra, Wipro, TCS, and HCLTech also gained.
Buyback boost and US jobs data
A buyback is often interpreted as a signal that Infosys believes in its own value and wants to reward shareholders—a move that's catching attention right now.
Plus, softer US jobs data is making investors hopeful for a Federal Reserve rate cut next week (September 16-17).
Since more than half of Indian IT's revenue comes from the US, lower rates there could mean bigger tech budgets and more business for Indian IT companies.
Rate cut anticipation and investment flow
Easier US monetary policy tends to attract investment into India.
As Dr. VK Vijayakumar from Geojit Financial Services suggests, Fed guidance will be key for market direction, with his expectation of a rate cut.
Together with Infosys's announcement, these factors have powered the strongest surge in IT stocks in weeks.