IT Stocks Surge for Second Day Amid US Trade Talks and Fed Rate Cut Hopes

Indian IT stocks rallied for the second consecutive day, with the Nifty IT index leading gains among major sectoral indices. The index surged over 2% in morning trade, reaching 36,075.95, as shares of major IT companies like

cle Financial Services Software (OFSS), , and others climbed up to 8%. This strong performance follows a five-day losing streak, signaling renewed investor optimism in the sector. Key Triggers for the Rally Resumption of India-US Trade Talks A significant catalyst for the IT sector's rally was an announcement by US President Donald Trump regarding the resumption of trade negotiations between India and the United States. In a post on Truth Social, Trump stated, "I am pleased to announce that India, and the United States of America, are continuing negotiations to address the Trade Barriers between our two Nations." The prospect of resolving trade frictions has boosted confidence in IT companies, many of which rely heavily on the US market for revenue. Expectations of US Federal Reserve Rate Cuts Market sentiment was further buoyed by growing expectations of interest rate cuts by the US Federal Reserve. Lower interest rates in the US are anticipated to stimulate economic activity, potentially increasing demand for IT services as businesses ramp up digital transformation and technology investments. This optimism has particularly favored IT firms with significant exposure to the US market.