Fed funds futures now point to a 57% chance that the Fed will cut by 25 basis points next month, up from less than a 30% chance a week ago.
Infosys shares rallied 2.5% to their day’s high of Rs 1,585 per share. Tech Mahindra rallied over 3% to its high of Rs 1,508 per share on the NSE. HCL Tech surged 2% to its day high of Rs 1,640 per share while TCS gained 1% to Rs 3,179 per share.
The positive sentiment also came after domestic brokerage firm Motilal Oswal dished out a bullish outlook on the sector and handed a few upgrades.
Motilal Oswal has turned positive on Infosys, upgrading the stock to Buy on expectations that demand for its Topaz AI services suite and full-stack application capabilities will rebound. The brokerage believes Infosys is well positioned to capture enterprise-wide AI spending and that, at current valuations, the risk-reward is skewed favourably.
Mphasis has also been upgraded to Buy after a strong second quarter, where TCV surged 155% year-on-year to $528 million, pushing its first-half FY26 TCV above the full-year FY25 tally of $1.3 billion. Motilal Oswal noted that challenges with a large logistics client have largely stabilised and sees BFSI demand supporting the business amid broader uncertainty, aided by steady deal ramp-ups.Also Read: Rs 4.4 lakh crore rally! Reliance Industries shares surge 26% in 2025. What’s fueling Ambani’s unstoppable run?In line with the sector’s valuation re-rating, the brokerage has lifted Wipro to Neutral. Its preferred plays for the next phase of AI adoption include Hexaware and Coforge in the mid-tier space, and HCLTech and Tech Mahindra among large-caps.
Motilal Oswal highlighted that IT services continue to contribute a stable 15% of Nifty profits over the past four years, even as the sector’s index weight has dropped to a decade-low 10% from its 19% peak in December 2021. The firm sees this divergence as an attractive opportunity, arguing that current stock prices already factor in muted demand and GenAI-led deflation, while any improvement could lead to outsized gains.
The brokerage has raised its growth estimates to reflect a gradual recovery, expecting early signs of improvement in the second half of FY27, with a fuller uptick emerging in FY28 as enterprises move into large-scale AI deployment.
“The winners who avoid this fate will likely be companies with the readiness to disrupt their models and sell services as software,” Motilal Oswal said in a note dated November 24.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)
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