IT stocks jumped 1.4% today, led by a 3.4% jump in Infosys after it announced plans to consider a share buyback.
India’s stock market rose in early trade today, led IT stocks after Infosys Ltd. announced its plans to consider a share buyback, even as hopes of a US Fed rate cut and GST reforms served as tailwinds.
At 11:15 am, the 30-share BSE Sensex was up 0.27% at 81,002.52 points even as broader NSE Nifty 50 was trading 0.25% higher at 24,835.80 points. Seven of the 16 major sectors rose, with the broader mid-caps and small-caps trading little changed.
“The positive news flows around GST cuts and the US Fed rate cut is providing a floor to the market, protecting it from a downside,” Dharmesh Kant, head of equity research at Cholamandalam Securities, told Reuters. “It was much needed in the context of uncertainty stemming from US tariffs.”
The Nifty IT index jumped 2.3%, led by a more than 4% surge in Infosys’ share price after it announced plans to consider a share buyback on 11 September. The sector accounted for more than 85% of the Nifty’s gains on the day. The top three gainers on the index were IT firms.
Prospects of a US Fed rate cut and rupee depreciation are also providing tailwinds to the IT sector, according to analysts.
Lower interest rates in the US bodes well for Indian IT firms as it can revive technology spending in the world’s largest economy—a key market for the sector. Lower interest rates also make emerging markets such as India more attractive for investors.
Bets for a US Fed rate cut at its 16-17 September policy meeting rose after data showed fewer-than-expected job additions in August.
Other Stock Market News
Auto stocks eased 0.3%, following a 3.3% jump in the previous session on prospects of demand revival after tax cuts.
RailTel Corp. of India rose 5.7% on receipt of multiple orders on Monday.
Meanwhile, the Securities Appellate Tribunal is set to begin hearing for US-based Jane Street’s case against India’s market regulator in an alleged market manipulation case.
The article originally appeared on Hindustan Times
