Powell's Dovish Tone
The rally in IT stocks on August 25 was largely credited to Jerome Powell's dovish comments. His hints at possible policy adjustments created a favorable
environment. Traders anticipated a rate cut, which could attract foreign investment to India, benefiting IT exporters. This sent ripples through the market.
JPMorgan's TCS Boost
JPMorgan's upgrade of TCS from Neutral to Overweight was another key factor. They raised the price target to Rs 3,800 per share, suggesting a 24% upside. The brokerage's positive outlook, coupled with the dovish stance, significantly influenced investor sentiment, particularly towards TCS.
Domestic Support Strong
Apart from the Fed, domestic factors played a crucial role. S&P upgrades and structural reforms, such as GST, strengthened investment prospects for Indian equities. While foreign investors were cautious, domestic institutional inflows reached a record $80 billion—double the FPI outflows of $40 billion, indicating robust local support.
Index Performance Recap
Wipro led the charge, with gains over 3%, followed by Infosys, TCS, HCLTech, and Tech Mahindra. The Nifty IT index rose over 2% in early trade. The index has gained 16% year-to-date in 2025, but only 1.7% in the past month, which reflects uncertainties, followed by renewed optimism after the dovish tilt.
