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Informist, Friday, Aug. 29, 2025

MUMBAI – Information technology stocks are expected to remain largely range-bound in the near term as uncertainty over US tariffs persists. While valuation comfort in these stocks offers downside protection, absence of positive triggers limits upward movement, an analyst at a domestic brokerage said. Any further upward movement in the near term will depend on positive cues on an interest rate cut by the US Federal Reserve at its upcoming policy meeting in September, according to analysts.

Next week, investors will take cues from the US Federal Reserve's preferred inflation measure, the Personal Consumption Expenditures Price Index released earlier in the day. Data showed US core inflation in July, excluding food and energy costs, rose 0.3% on a monthly basis and 2.9% on a year-on-year basis, in line with expectations. This is above the central bank's inflation target of 2%. 

Thursday, Fed Governor Christopher Waller said he wants to start cutting interest rates next month and expects more cuts to follow. "Based on what I know today, I would support a 25 basis-point cut" at the upcoming meeting of the US Federal Open Market Committee in September, Reuters reported Waller as saying at an event hosted by the Economic Club of Miami.

Earlier this week, global brokerage CLSA said it remains bullish on Indian IT stocks after US technology giant Nvidia's June-quarter results, citing strong US growth and a revival in discretionary spending. The IT sector's attractive valuations, both historically and relative to the Nifty 50 and NASDAQ, offer downside protection, the brokerage said. On Wednesday, Nvidia reported better-than-expected earnings and revenue and said its sales growth this quarter will remain above 50%, signalling that demand for artificial intelligence infrastructure continues. 

Over the week, the Nifty IT index fell 0.7% after rising for two weeks in a row. This fall was, however, less steep than the 1.8% fall in the benchmark Nifty 50 and BSE Sensex over the same period. Barring Tata Consultancy Services and Wipro, all other constituents of the index fell over the week. 

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

End

Reported by Arya S. Biju

Edited by Rajeev Pai

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