Infosys, TCS, Tech Mahindra, other tech stocks lift Nifty IT another 2%; 4 factors fueling the rally

Indian tech stocks extended gains for the third consecutive session on Wednesday, November 12, with sentiment toward the sector staying upbeat amid multiple positive developments, pushing the Nifty IT index close to a two-month high and making it one of the top contributors to the recent rally in frontline indices.

All ten constituents of the index traded higher, with Tech Mahindra leading the gains, surging 3.6% to ₹1,459, followed by LTIMindtree, Mphasis, and TCS, each rising up to 3.5%.

Other key stocks, including Persistent Systems, Oracle Financial Services, HCL Tech, Coforge, Wipro, and Infosys, also traded higher, with gains ranging between 1.5% and 2.2%.

Amid the strong rally in individual counters, the Nifty IT index zoomed 2.16% to a day’s high of 36,911, marking its highest level since September 18. The move also resulted in a three-day cumulative gain of 5.10%, taking today’s high into account.

The recent rally was driven by a combination of factors, including US President Donald Trump’s softer stance on H1-B visas, progress on the US-India trade deal, easing concerns over the US government shutdown, and renewed hopes of another interest rate cut by the US Federal Reserve.

Trump’s softer tone on H1-B visas

US President Donald Trump appeared to soften his stance on H1-B visas during a Tuesday interview, saying, “We have to bring in talent.” He emphasized that the United States “does not have plenty of talent.”

Trump explained, “You can’t take people off the unemployment line and say, ‘go make missiles.’” When asked about raising wages for Americans without flooding the country with foreign workers, he responded, “I agree, but we also do have to bring in talent.” He further clarified, “No, we don’t… You don’t have certain talents, and people have to learn.”

The comments helped reassure markets that skilled talent flows from India to the US could continue, benefiting the IT sector. In September, the Trump administration slapped a $100,000 fee on H-1B visas. The move stunned and confused employers, students, and workers from the United States to India and beyond.

US government shutdown nearing resolution

Investor sentiment was further supported by news that the US government shutdown will likely end soon. On Wednesday, the Senate passed a temporary funding measure, keeping most of the government open through January 30, with some agencies funded until September 30.

The House of Representatives is expected to consider the spending package upon returning to Washington. If approved, the bill will go to President Trump, who has already endorsed it. This development eased concerns over prolonged disruptions to economic activity.

Progress on US-India trade deal

On Monday, Trump indicated that tariffs on India would be lowered “very substantially,” signaling a thaw in tensions over New Delhi’s Russian oil purchases as the two countries move toward a trade deal.

“We’re working on a very good deal with India. The tariffs will come down very substantially. It will happen at some point,” Trump said at the swearing-in ceremony of Sergio Gor as the US ambassador to India.

Mint first reported on 22 September that US tariffs on India may be reduced to 15-16% from a steep 50% and that a deal is likely to be announced in November. Indian imports to the U.S. currently face 50% tariffs, primarily due to a penalty duty of 25% over New Delhi's purchase of Russian oil.

Hopes of a US Fed rate cut strengthen

Expectations of another rate cut from the US Federal Reserve have intensified amid signs of a slowing labor market. Private data showed that US companies shed an average of 11,250 jobs per week in the four weeks ending October 25, highlighting ongoing weakness and supporting the likelihood of further rate reductions.

Traders currently price in roughly a 68% chance of a 25 basis-point rate cut next month.

Additional pressure comes from declining consumer sentiment, which fell sharply in November to its second-lowest reading on record. Investors are also awaiting a wave of official data as the US moves to end its longest-ever government shutdown.

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