Mumbai: Tech stocks witnessed a rally on January 9, fueled by robust buying activities ahead of the impending earnings announcements from IT giants Infosys and Tata Consultancy Services for the December quarter. The optimism in the market was further heightened by expectations of a potential rate reversal by major central banks.

Both Infosys and Tata Consultancy Services are set to unveil their financial results for the third quarter of FY24 on January 11, marking the commencement of the earnings season. The prevailing bullish sentiment in the market has prompted investors to place their bets on an improvement in macro fundamentals as the rate-tightening cycle approaches its end.

Vinod TP, a research analyst at Geojit Financial Services, noted, “Despite industry challenges, there is optimism in the sector, which is driven by anticipation of the end of the rate-tightening cycle. This is expected to accelerate the resumption of delayed projects.”

While many tech stocks refrained from participating in the 2023 bull run, maintaining reasonable valuations, this has served as an attractive proposition for investors, leading to increased interest in the sector.

As of 11:25 am, shares of L&T Technology Services, Infosys, HCLTech, Wipro, TCS, and Tech Mahindra showed gains ranging from 1-2 percent on the NSE, consequently propelling the Nifty IT index over 1 percent.

Analysts, however, anticipate a subdued quarter for the IT sector in the December quarter, attributing it to prolonged high inflation, delays in discretionary projects, and an overall sluggish growth trend. Additionally, the October-December period traditionally constitutes a slow quarter for tech firms, primarily due to the holiday season in the US and Europe, which represent the largest markets for Indian IT companies.