The Nifty IT index surged over 3 percent on November 22, buoyed by robust labour market data from the US. Initial jobless claims in the US fell by 6,000 to a seasonally adjusted 213,000 for the week ended November 16, marking a seven-month low. This data suggests that US job growth likely rebounded in November after last month's slowdown caused by hurricanes and strikes.
A stronger labour market in the US bodes well for Indian IT firms, which derive a significant portion of their revenue from the region.
At 3.10 PM, the Nifty IT index was up 3.4 percent at 43,370, with TCS, Infosys, and HCLTech leading the charge. Today marked the third consecutive day of gains for the index. After declining 2 percent in September and 3.7 percent in October, Nifty IT has rebounded, gaining over 7 percent so far in November.
All ten components of the IT index were trading higher, rising between 1-4 percent each.
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Shares of midcap IT firm Mphasis rose 3.5 percent after the company's announcement as the 'Official Digital Partner' of the MoneyGram Haas F1 Team. Haas Formula LLC, operating as the MoneyGram Haas F1 Team, is a US-based Formula One team founded in April 2014 by Gene Haas, who also co-owns a NASCAR Cup Series team.
Mphasis said that it will work closely with the team to create innovative solutions aimed at enhancing on-track performance and improving operational efficiency off the track.
Shares of HCLTech gained attention and were up over 3 percent after Morgan Stanley, in its recent research report, said that HCLTech's US operations were well-positioned to mitigate risks from potential changes in U.S. visa regulations following Donald Trump's return to the White House, with approximately 80 percent of HCLTech's US-based employees being non-visa dependent.
Also Read | HCLTech well-positioned to tackle any potential US visa policy shifts, says Morgan Stanley
In a research report dated November 19, Goldman Sachs Global Investment Research, said, "Revenue growth for India IT has bottomed and we expect an acceleration in revenue growth to 8 percent YoY in FY26 (vs c.1%/4% in FY24/FY25E), driven by improving demand trends, deal ramp-ups and recovery in small deal pipeline."
According to the brokerage, key themes to monitor include the revival of discretionary spending by enterprises, reflected in the uptick in the small deal pipeline for IT companies, and the emerging monetisable opportunities from generative AI.
However, a prolonged period of macroeconomic weakness and the deflationary impact of generative AI could pose risks for IT companies, Goldman Sachs said.
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