Stock Market: Tech-giants roar on US bourses; Fed under pressure to tone down

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By S Jha

New Delhi, April 28: Next week when the US Federal Reserve unveils new policy roadmaps, the expectation is growing that the mandarins of high interest rate regime may be covering their faces. The quarterly US GDP growth tanked to 1.1 per cent, much below the street expectations of 1.8 per cent, signaling that the largest economy in the world is certainly moving faster into intense phase of slowdown.

Also, the data, including the US jobless and consumption, all signaled that the largest economy in the world needs to be rescued from the US Fed Reserve, which by its hawkish stance has taken the economy, as well as the financial institutions to the into the claws of the bears.

The US bourses sought to have read the signals on the streets, as both Dow Jones and NASDAQ sharply climbed by over one and a half per cent to deliver one of the best performances since January, almost three months. The bourses were also helped by bullish numbers from tech-giants such as Meta in their quarterly results.

The early signs of a tech-turnaround in the US and Indian bourses were visible for past couple of days. The Indian IT scrips appear to suggest that they had bottomed out, as some of them started bouncing back. While KPIT Tech has smashed the de-rating call to go trending on the back of the quarterly result, which cheered the street, the likes of LT Technology Services too trended on the back of strong numbers.

Tata Elexi, which had almost lost 45 per cent from its peak, too trended up with a gain of over six per cent on Thursday. The IT giants such as Wipro, Infosys and TCS too gave suggestions of stabilizing after sharp corrections on the back of disappointing results.

Trends for the past few quarters clearly point out a divergence in the quarterly results of the IT largecaps and their midcap and smallcap peers. The smaller IT companies continue to surprise the street with their growth numbers.

The rally on NASDAQ is also likely to bring cheers on the IT index in the Indian bourses. In fact, the two most laggard sectors for the past 18 months, realty and IT, appear to be showing signs of turnaround as far as action on the stocks is concerned. Realty index was the top gainer on Thursday. Also, the foreign institutional investors once again pumped more than Rs 1000 crores in a day in the cash market – Rs 1653 crores. On Wednesday, the FIIs had a net buy in the cash market of Rs 1247 crores.