Technology Stocks Shine: Infosys, Coforge, Wipro Drive IT Index Higher

Technology stocks lead market gains on Tuesday, with the Nifty IT index snapping a 5-day losing streak. It was the top index gainer, rising over 2%. 

IT companies saw broad-based buying: Infosys was the top Nifty gainer, surging over 4%, while Coforge, Wipro, Mphasis, and Tech Mahindra gained over 2% on Tuesday. 

Increased optimism of a potential rate cut by the US Federal Reserve, expectations of robust foreign investor inflows, and the announcement of a possible buyback by Infosys are driving this rally in technology. 

US Federal Reserve Rate Cut Expectations

Analysts are predicting a 50-basis-point interest rate reduction by the U.S. Federal Reserve during its forthcoming policy meeting this month. This forecast follows a lackluster jobs report for August and comments from Fed Chair Jerome Powell last month, who suggested a potential rate cut at the September 16-17 meeting due to rising labor market risks, despite persistent inflation concerns.

Lower interest rates in the US generally enhance the appeal of emerging markets like India for foreign institutional investors (FIIs), thereby bolstering inflows into Indian IT stocks.

All Eyes On Infosys Buyback 

India's second-largest IT company said that its board will meet on September 11 to consider a proposal for the buyback of fully paid-up equity shares. If approved, this would mark the company's first share buyback since 2022. This comes at a time when US President Donald Trump's tariff threats on the IT sector and additional visa restrictions weigh on the outlook for Indian IT companies. 

Infosys had last approved a proposal for Rs 9,300 crore buyback in 2022, with a minimum buyback price of ₹1,850 per share.

Investors will be watching out for clarity on quantum, record date & execution of the buyback when the Infosys board meets later this week.  

Foreign Investor Interest

Technology remains one of the top sectors for Foreign Institutional Investors (FII) holdings. Investors are also watching broader market optimism, supported by GST rate cut expectations and the overall resilience of India's economy.

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