IT shares snap three-day gaining streak ahead of US Fed meet; Coforge, TCS, others fall up to 1.5%

The shares of several IT companies dropped on June 18, pushing the Nifty IT index down over half a percent to hover in the red and snap a three-day gaining streak. This comes as investors may have resorted to profit booking at elevated levels, while awaiting a possible rate cut by the US Federal Reserve.

The Nifty IT index stood at around 39,138 in the morning, bucking the overall market trend with benchmark indices Sensex and Nifty being in the green.

Notably, IT stocks had recorded significant gains recently. The Nifty IT index closed in the green in nine out of the last 10 sessions, dodging the overall volatility in the market. This came on the back of expectations of US Federal Reserve announcing a rate cut today after its meeting. Softer inflation and weakening jobs data have boosted the rate cut hopes.

Indian IT companies derive a major portion of their revenues from US market. A rate cut by the American central bank will likely boost US discretionary demand, which in turn may benefit the IT firms.