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Business News/ Markets / Stock Markets/  Nifty IT gains 2.35% on drop in US inflation; Persistent Systems hits record high
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Nifty IT gains 2.35% on drop in US inflation; Persistent Systems hits record high

The drop in US inflation and yields, along with India's CPI inflation moderation, fueled a robust rally in the Indian market. Shares of Persistent Systems recorded a new all-time high of ₹6,396 apiece in today's trade.

Shares of Persistent Systems recorded a new all-time high of ₹6,396 apiece in today's trade.Premium
Shares of Persistent Systems recorded a new all-time high of 6,396 apiece in today's trade.

The Indian market surged sharply in today's trading session, propelled by favorable global and domestic indicators. These include the drop in the inflation rate in the United States to 3.2% in October, down from 3.7% in September. This has raised optimism that the US Federal Reserve might adopt a more measured approach to the rate hike.

Additionally, the drop in US 10-year yields to the 4.5% mark and a 1.50% drop in the US Dollar index to 104 levels in the preceding trading session have collectively fueled the robust rally observed today. India's CPI inflation also moderated in October to 4.87%, the lowest in four months. 

Also Read: Impact of US inflation data on stock markets, here are 5 things to watch out for in near-term

"The October US inflation data is a game changer for the stock market. The 3.2% October inflation print is lower than expected. More importantly, the mere 0.2% MoM increase in core inflation is hugely positive. The takeaway from these numbers is that the Fed is done with rate hikes, and the timeline for rate cuts in 2024 is likely to be advanced," said V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.

Also Read: Mint Explainer: Why Narayana Murthy's call for a 70-hour work week won't fly

Both benchmark indices, the Nifty 50 and the S&P BSE Sensex, experienced a surge of over a percent. Notably, the Nifty IT index outperformed, soaring by 2.35% intraday to reach 31,357 levels. All 10 constituents of the index are currently trading in the green, with Mphasis leading the way with a remarkable rally of 4.5% at 2,249 apiece.

Following closely are Coforge (up 3.4%), Tech Mahindra (up 3.4%), LTIMindtree (up 2.2%), L&T Technology Services (up 2%), Wipro (up 2%), Infosys (up 1.8%), TCS (up 1.4%), HCL Tech (up 1%), and Persistent Systems (up 1%).

Shares of Persistent Systems recorded a new all-time high of 6,396 apiece in today's trade. This year, the stock achieved multiple milestones, including crossing the 5,000 mark in February and, in the subsequent seven months, surpassing the 6,000 mark.

In CY23 so far, the stock has gained 61.98%, spiking from 3,888.95 to 6,270 apiece and also standing as the top performer of the index.

Also Read: Q2 results review: Major players report soft earnings; what's the road ahead for IT sector?

Meanwhile, the Nifty IT dropped 3.78% in October, registering the biggest monthly drop since December 2022, as major Indian IT companies, including TCS, Infosys, and Wipro, reported September numbers below the Street estimates and also trimmed their revenue guidance.

Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before taking any investment decisions.

 

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Published: 15 Nov 2023, 02:23 PM IST
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