IT Stocks Rise 3%: Why Rupee Rebound Matters

The Indian IT sector saw a significant surge in stock prices, with Infosys, Wipro, and Tata Consultancy Services rising as much as 3% in Monday's trading session. This uptrend was sparked by the Indian Rupee's rebound, which signaled the return of foreign investors to domestic markets and boosted overall sentiment.

Market Performance

The Nifty IT index was up nearly 1.69% or 653.35 points to 39,344.95 on Monday, December 22. Wipro's share price led the pack, rising 3% to ₹272.22, followed by Infosys shares gaining 2.25% to ₹1,675.60.

Reasons Behind the Rally

According to experts, the rally in IT stocks can be attributed to the Indian Rupee's bounce back from its record low of 91.07. The Rupee's strengthening has led to an increase in foreign portfolio investments, with net buying of Indian equities worth ₹18.31 billion on Friday.

• Foreign portfolio investors were net buyers of Indian equities worth ₹18.31 billion on Friday
• The Indian Rupee bounced back from 91.14 to 89.29 against the dollar
• FIIs were buyers in the cash market with a total buy figure of ₹3596 crores over the last three trading days

Future Outlook

Optimism is growing around the prospect of additional interest rate cuts by the US Federal Reserve, following a slower-than-expected increase in US consumer inflation. This has revived expectations that the US Federal Reserve could implement additional interest rate cuts in the near term.

Key Takeaways:

• IT stocks are expected to continue their uptrend due to the Rupee's rebound and increased foreign investments
• The US Federal Reserve's potential interest rate cuts could further boost the Indian stock market
• Investors should consult with an investment advisor before making any investment decisions