Key Factors Behind the 4th Consecutive Day of Gains in Indian IT Stocks

On December 2, 2025, shares of major Indian IT firms like Infosys, Wipro, TCS, HCL Tech, and Tech Mahindra rose sharply, pushing the Nifty IT index up 1.35% to 39,214.90 by mid-morning. This marked the fourth straight session of gains, with the index adding over 1,150 points (more than 3%) in the streak. The surge was driven by a mix of global cues, sector-specific developments, and technical factors. Below are the six key reasons outlined in recent market analysis:

ADR Surge: Infosys' American Depository Receipts (ADRs) hit fresh record highs and a 52-week peak on aggressive short-covering. They opened nearly 40% higher before trimming gains, triggered by a short squeeze after a major lender recalled a large volume of lent shares. This forced short sellers to rush into the thinly traded market to cover positions, bidding up prices sharply. Infosys clarified it is unaware of any material corporate event behind the spike. Soft US Inflation Data: November US consumer prices rose 2.7% year-on-year, down from 3% in October. This cooling inflation reignited expectations for additional Federal Reserve rate cuts, providing a tailwind for US-dependent IT exporters. Heightened Hopes for Further Fed Rate Cuts: Positive signals from the Fed bolstered sentiment. Governor Christopher Waller noted, "I still think we're probably, you know, maybe we're 50 to 100 basis points off of neutral," indicating room for 50-100 basis points more in cuts amid softening job data. Lower rates could boost US discretionary spending, benefiting IT services firms with heavy exposure to the American market. Robust Accenture Earnings: Peer Accenture beat Q1 revenue estimates at $18.74 billion (vs. $18.52 billion expected) and reported 12% growth in new bookings to $20.9 billion, fueled by AI-driven demand. Management affirmed steady spending levels, signaling resilience in consulting and tech services.