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Informist, Friday, Dec. 5, 2025

MUMBAI – Information technology stocks are expected to move northward in the coming week on positive domestic and global cues. Investors will watch out for the outcome of the US Federal Reserve's policy meeting next week and the possibility of India-US trade deal. A US trade delegation is expected to visit India next week and both sides are hopeful of signing a framework deal by the end of 2025 to address the tariffs imposed by the US on goods imported from India.

The Nifty IT index rose 3.5% this week buoyed by continued depreciation of the rupee against the dollar and increasing bets of an interest rate cut by the US Fed. The apex bank is widely expected to trim its key interest rate by a quarter-percentage point in its policy meeting on Dec. 9-10 to support a cooling labour market. Traders are pricing in an 87% probability of a 25-basis-point interest rate cut, according to the CME FedWatch Tool. A reduction in interest rates by the Fed is a positive for domestic IT companies which earn a major portion of their revenue from the US, as this would improve the discretionary spending by US-based clients on IT.

This week, the Indian rupee fell below the psychologically-crucial 90-per-dollar level, weighed down by a delay in India-US trade deal and continued outflow of foreign institutional funds from domestic equities. Depreciation of the rupee against the dollar is also seen as a positive for the domestic IT sector, as majority of their revenue comes from the US and depreciation of the Indian unit will help boost their earnings and profitability.

"I think some of the stocks from IT are showing sign of positive divergence. So, I think another 3-4% upside we cannot rule out in IT stocks because already time and price correction is already played out in this sector and looking at the rupee weakness, may give some support buying action in IT," Rajesh Palviya, head of technical and derivatives research at Axis Securities, said. Nandish Shah, a technical analyst at HDFC Securities, expects IT stocks to do well even if in a scenario where the rupee may see some appreciation from here.

Next week, the Nifty IT index is seen finding support at 37400 points and resistance at 39500 points, said Vipin Kumaar, derivatives and technical analyst at Globe Capital Market. On Friday, the index closed nearly 1% higher at 38703.65 points, with all the constituents ending in the green.

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

End

US$1 = INR 89.98

Reported by Arya S. Biju

Edited by Ashish Shirke

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