Indian IT Stocks Witness Downturn Amidst Concerns Over US Inflation Data

Indian IT Stocks Witness Downturn Amidst Concerns Over US Inflation Data

VoM News Desk | February 14, 2024 | 10:53 AM IST | Breaking News | Follow on Google News

Indian IT Stocks Witness Downturn Amidst Concerns Over US Inflation Data

Indian IT Stocks Witness Downturn Amidst Concerns Over US Inflation Data

Amidst higher-than-anticipated US consumer inflation data, Indian IT stocks faced a downturn in today’s trading session, reflecting concerns about the Federal Reserve’s ability to implement multiple rate cuts this year. The US Bureau of Labor Statistics reported a yearly inflation rate of 3.1% in January, above market expectations of 2.9%, impacting global equity markets.

Fed’s Rate Cut Expectations Dashed

Expectations of a rate cut by the Federal Reserve had been a significant catalyst for the rally in global equity markets. However, the US CPI inflation rising to 3.1% year on year, against the expected 2.9%, has led to a shift in market sentiment. This indicates that the Fed is less likely to cut rates in March, impacting the number of anticipated rate cuts in 2024.

Global Markets React

Major global equity markets concluded Tuesday’s session in the red, with the S&P 500, Dow Jones, and Nasdaq all closing lower. Following this trend, Indian stocks, including frontline indices Nifty and Sensex, commenced Wednesday’s session with losses, each experiencing a 0.70% decline as of 10:00 a.m.

Impact on Indian IT Stocks

Indian IT stocks, heavily reliant on the US market for revenue, traded in negative territory. All 10 constituents of the Nifty IT index were in the red, with L&T Technology Services being the top loser. IT stocks had been on an upward trend fueled by expectations of a first-rate cut from the Fed in March, which now appears unlikely in the immediate future.

Current Market Scenario

As of the latest update, the Nifty IT index is trading with a cut of 1.67% at 37,569 points. In the early trade, the index hit a low of 37,344 points, marking a drop of 2.25%. The entire sector is facing declines between 1.3% and 4.1%, signaling a shift in investor sentiment based on the changing expectations regarding Federal Reserve actions.

VoM News Desk

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