Infosys, Wipro ADRs rally as Accenture outlook lifts sentiment, Fed rate hike bets fade
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Shares of Indian IT companies rose in US trading on Thursday, with Infosys and Wipro ADRs gaining after Accenture's strong results and a sharp drop in expectations of a Federal Reserve rate hike.
Infosys ADRs closed 4.1% higher at $1,035, while Wipro gained 0.5% to $159.35. Cognizant Technology Solutions, which is listed on Nasdaq, rose 6% to $60.88.
Accenture was the biggest mover among major IT companies, with its shares jumping 22.3% after the company reported better-than-expected quarterly numbers and gave a stronger outlook for fiscal 2027.
Accenture expects revenue to grow 3%-6% in local currency in FY27. Its fourth-quarter revenue stood at $18.68 billion, against the $18.03 billion expected by analysts. Bookings rose 4% to $22.17 billion, while consulting revenue increased 7% to $9.28 billion.
Accenture results lift IT stocks
The numbers came at a time when investors have been watching closely for signs that spending on technology services is holding up despite the rapid adoption of artificial intelligence.
Accenture's results offered some comfort on that front. The company said clients were continuing to spend on areas such as AI, automation and technology transformation.
The gains in US-listed IT stocks came after a strong session for Indian IT shares as well. Infosys ended Thursday's trade 4.1% higher, while Wipro gained 0.5%.
Cognizant's nearly 6% rise added to the move in the broader IT services space.
Fed hike bets fall sharply
Rate expectations also turned more favourable for technology stocks.
CME FedWatch data on Friday showed a 74% probability of the US Federal Reserve keeping its target range at 3.75%-4% at its October 28 meeting. The probability of a 25-basis-point hike had fallen to 26%.
A week ago, the numbers were almost the other way around. The probability of a hike stood at 64.2%, while the odds of a pause were 35.8%.
The change in rate expectations came after softer inflation data and comments from Fed officials, including vice chair Philip Jefferson, who indicated that policymakers could take more time before deciding on another rate move.
Lower expectations of a near-term rate hike have also eased some pressure on technology and other growth stocks, which tend to be sensitive to interest-rate expectations.