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Informist, Thursday, Mar. 13, 2025

MUMBAI - Information technology stocks are expected to largely track the US' technology-heavy Nasdaq Composite index in the near term amid uncertainty around US President Donald Trump's tariff measures and fears of an economic slowdown in the US persist, according to analysts. Indian IT stocks will take cues from the US Federal Reserve's decision on interest rates and global IT leader Accenture's Dec-Feb earnings commentary scheduled next week. 

This week, the Nifty IT index remained in the red as concerns over slowing US discretionary spending weighed on investor sentiment. The index fell 4.5% over the week, extending its losing streak for the fifth consecutive session. IT stocks tanked Wednesday, hitting over an eight-month low of 35828.8 points as analysts raised concerns about the revival of US discretionary IT spending and the industry's growth recovery in 2025-26 (Apr-Mar).

Supply chain disruptions on account of Trump's tariff measures are expected to limit clients' discretionary spending, Rishubh Vasa, a research analyst covering the sector at Indsec Securities, said, adding that this will further delay the recovery in discretionary spending, which was expected in

Jan-Mar. He expects it to be delayed by two quarters from now. Vasa also expects this tariff-led slowdown in discretionary spending to have a 1-2% impact on IT companies' revenue in FY26 and FY27. 

US Consumer Price Index moderated in February, rising 0.2% for the month. The annual inflation rate came in at 2.8%, slightly below expectations. Despite the softer CPI data, analysts do not expect the US Fed to cut interest rates soon as they will be evaluating the impact of tariff measures by the US and the reciprocal measures taken by other countries. "Although the current inflation rate is below expectations, the impact of tariff impositions will be seen in the next three to six months, then that can be inflationary... to that extent, the rate cut expectation can be tempered or subdued," Sunny Agrawal, head of Fundamental Equity Research at SBICAPS Securities, said. Commentary from the Fed Chairman Jerome Powell at the 

Federal Open Market Committee meeting scheduled for next week will be tracked to get clarity on the next interest rate cut, Agrawal added. 

Accenture's earnings are seen as a crucial indicator for Indian information technology companies. Earlier in December, the company said it expects revenues for the February quarter to be in the range of $16.2 billion to $16.8 billion, or 5% to 9% growth. In the near term, the IT index is likely to find support at 35200 points and resistance at 37200 points, Ajit Mishra, senior vice-president at Religare Broking, told Informist Wednesday. 

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Following are the resistance and support levels for the stocks for next week as per calculations by Informist based on their prices on the National Stock Exchange:

End

US$1 = INR 86.99

Reported by Arya S. Biju

Edited by Vandana Hingorani

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