Last Updated:December 22, 2025, 12:23 IST

Shares of Indian IT companies rallied on December 2, pushing the Nifty IT index into positive territory for the fourth straight session

IT Stocks Surge

IT Shares Surge: Shares of Indian IT companies rallied on December 2, pushing the Nifty IT index into positive territory for the fourth straight session. Growing expectations of further interest rate cuts by the US Federal Reserve and a sharp surge in Infosys ADRs were among the six key drivers behind the move.

The Nifty IT index rose 1.35 per cent to 39,214.90 as of 10:10 am. The index has now climbed over 1,150 points, or more than 3 per cent, over the past four sessions.

Infosys ADR surge

Infosys Ltd’s American Depository Receipts (ADRs) jumped sharply to fresh record highs on Friday, even as the company clarified that it was not aware of any material event behind the sudden spike. The ADRs hit a 52-week high amid aggressive short-covering, opening nearly 40 per cent higher before paring some gains.

Traders told Moneycontrol that the sharp rally was triggered by a short squeeze after a major lender recalled a large quantity of stock lent in the market. The sudden recall forced traders holding short positions to rush to cover their exposure, sharply driving up prices in a relatively illiquid counter.

“It looks like there is some buying interest after the surge in ADRs. But there doesn’t seem to be much substance to it as fundamentals and export competitiveness have not changed. Therefore, we expect things to return to normalcy,” said UR Bhat, co-founder of Alphaniti Fintech.

Soft US inflation data

US consumer price inflation eased more than expected in November. Consumer prices rose 2.7 per cent year-on-year, slowing from a 3 per cent increase recorded in the 12 months through September.

The moderation in the US Consumer Price Index, reported by the Labour Department’s Bureau of Labour Statistics on Thursday, has revived hopes of additional rate cuts by the Federal Reserve in the near term.

Rising hopes of further Fed rate cuts

Alongside softer inflation data, positive commentary from US central bank officials also lifted expectations of further easing. Federal Reserve Governor Christopher Waller said on Wednesday that the Fed still has room to cut interest rates amid signs of weakness in the labour market.

“I still think we’re probably, you know, maybe we’re 50 to 100 basis points off of neutral,” Waller said at the Yale School of Management CEO Summit in New York, indicating scope for rate cuts if required.

Lower US interest rates could boost discretionary spending, benefiting Indian IT companies that derive a large share of their revenues from the US market.

Strong Accenture results

Accenture posted better-than-expected first-quarter results on Thursday, driven by strong demand for artificial intelligence solutions that help clients improve productivity.

The IT consulting major reported revenue of USD 18.74 billion, beating analysts’ average estimate of USD 18.52 billion, according to LSEG data. New bookings rose 12 per cent to USD 20.9 billion, including USD 9.88 billion in consulting bookings and USD 11.06 billion in managed services.

During its post-earnings call, Accenture’s management said overall and discretionary spending levels remained broadly in line with the previous year.

Value buying

The rally in IT stocks may also have been supported by value buying following months of underperformance. The sector has remained under pressure this year due to factors such as concerns over H1-B visa changes, tariff uncertainties and other global headwinds.

After a prolonged correction, investors may be re-entering the space, attracted by relatively attractive valuations.

Weakening rupee

After opening stronger, the rupee pared gains and slipped against the US dollar. Around 11:30 am, the rupee was trading at 89.70 per dollar.

A weaker rupee tends to benefit IT companies, as a significant portion of their revenues is denominated in US dollars.

Top IT gainers today

Wipro and Infosys were the top gainers on the Nifty IT index, rising more than 2 per cent each. Persistent Systems gained nearly 2 per cent.

HCL Technologies, Coforge and Tech Mahindra advanced over 1 per cent each, while Tata Consultancy Services added around 1 per cent. LTI Mindtree was trading marginally higher, while Mphasis slipped 1 per cent, bucking the broader sectoral trend.

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New Delhi: India’s capital market infrastructure sector, comprising brokers, stock exchanges, depositories and registry and transfer agents (RTAs), generated revenues of over Rs 700 billion in FY25, a report has said. 

The report from global brokerage Jefferies said the growth in revenues was due to rise in market volumes and increasing investor participation. The sector’s outlook will be shaped by faster growth in select segments, diversification into adjacent businesses and resilience to regulatory change, it added.

The brokerage projects mutual fund assets under management to grow at a 16 per cent compound annual rate over FY26–FY28, with mutual fund AUM projected to rise from Rs 67 trillion in FY25 to Rs 103 trillion by FY28.

Cash market average daily turnover (ADTO) is projected to grow 15 per cent and F&O premium ADTO will rise 12 per cent, reflecting moderation in derivatives activity after recent regulatory changes, the report forecasted.

The brokerage expects the number of demat accounts to increase from 192 million in FY25 to 304 million by FY28, and mutual fund folios to climb from 235 million to 377 million.

Brokers accounted for nearly Rs 500 billion of FY25 revenues and exchanges about Rs 200 billion, with depositories and registry and transfer agents contributing to the rest.

Brokers and exchanges are expected to grow faster than other capital market infrastructure segments, it added.

The stock exchanges’ growth will come from rising traction in index options, estimated to grow to around 35 per cent share of options market by FY28.

Brokers’ growth will come from expansion across products including margin trading facilities, commodities, bonds and wealth management, the report noted.

Younger investors are driving incremental participation, with those below 30 years constituting about 40 per cent of the base in FY25.

Analysts noted that the market is likely heading for a year-end rally. The rupee’s sharp reversal and FIIs’ cash market purchases can accelerate this rally, as they lead to short covering, pushing benchmark indices higher.

Fund mobilisation in the domestic stock market remained strong in the current financial year, with 83 companies raising Rs 1.3 lakh crore as of November in FY26, according to a report released by the National Stock Exchange (NSE).The report highlighted that fund raising momentum stayed robust, supported by several marquee initial public offerings (IPOs) that made their debut during the period.NSE stated, “On the mainboard, 83 companies raised Rs 1.3 lakh crore, with 41 per cent from fresh equity and 59 per cent via OFS”.In fresh equity, a company creates and sells new shares to the public. All of the money raised from these new shares goes directly to the company itself, which then uses the funds to expand the business, finance new projects, or pay off debts. In contrast, an Offer for Sale (OFS) involves existing owners, such as the company’s founders or early investors, selling their already-held shares to new investors.The report further noted that these newly listed companies now command a combined market capitalisation of over Rs 10 lakh crore, indicating the scale and depth of recent listings in the domestic market. This growth also reflects the increasing ability of Indian capital markets to attract large issuances and support companies across sectors.Investor participation patterns also showed notable trends. Retail participation strengthened to 25 per cent, highlighting growing interest from individual investors in primary market offerings. At the same time, the share of qualified institutional buyers (QIBs) moderated, according to the report.The NSE report also pointed to continued momentum in the SME segment through the Emerge platform. During the period under review, 80 companies were listed on the Emerge platform, raising a total of Rs 3,911 crore. Notably, 95 per cent of this amount was raised through fresh equity, underscoring the platform’s role in providing growth capital to small and medium enterprises.In addition, the report said that recent regulatory measures have further strengthened India’s listing ecosystem. These include the reduction in the minimum public offering requirement, extension of timelines for achieving minimum public shareholding for large entities, streamlining of migration criteria for SME companies moving from the Emerge platform to the mainboard, and enhanced disclosure norms.Overall, the report concluded that robust fundraising activity, strong participation from retail investors, and supportive regulatory measures continue to reinforce the role of India’s capital markets in driving long-term growth and expansion.