Nifty IT index dips over 2% as hot US inflation data raises concerns over rate cuts

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Also Read: US consumer inflation reduces to 3.1% in January Currently, the Federal Reserve is maintaining interest rates at their highest level in over two decades, aiming to gradually restore inflation to the targeted 2% rate over the long term. Since March 2022, the US central bank has increased its policy rate by 525 basis points to the current range of 5.25% to 5.50%. As concerns over potential Federal Reserve interest rate cuts heightened due to the significant inflation figures, major equity markets globally concluded Tuesday's session in the red.

The three major US indices, S&P 500, Dow Jones, and Nasdaq all closed lower. Following this trend, Indian stocks also commenced Wednesday's session with losses, with the frontline indices Nifty and Sensex each experiencing a 0.70% decline as of 10:00 a.m. Indian IT stocks, heavily reliant on the US market for revenue, were similarly trading in negative territory.

Also Read: China stocks in Hong Kong slide as market reopens from holiday All 10 constituents of the index are currently trading in red, with L&T Technology Services being the top loser with a drop of 4.1%, followed by MphasiS, Infosys, Wipro, Tech Mahindra, LTIMindtree, HCL Technologies, Coforge, Persistent Systems, and Tata Consultancy Services, all trading with declines between 1.3% and 3.5%. The Nifty IT is trading with a cut of 1.67% at 37,569 points. In the early trade, the index hit a low of 37,344 points, marking a drop of 2.25%.