Indian IT companies have been on a winning streak since the start of this week after the Group of Seven (G7) countries agreed to support a minimum global corporate tax rate. Tech-heavy stocks in Indian markets saw a strong rally and further increased sector indices on Sensex and Nifty 50, even as broad markets remained volatile this week ahead of inflation and key monetary policies in major economies. .
At around 11:37 am, Nifty IT was trading at 27,695.75, up 400.10 points or 1.47%. The index hit a new high of 27,732.35 in early trades today.
Although Coforge topped the list of winners on the index by strengthening by 3%, however, it was the large IT companies that added significant gains.
L&T Infotech jumped 2.4%, while Mindtree, Infosys, Tech Mahindra and HCL Tech climbed around 2% each. The heavy-duty TCS index climbed 1.3% each. Wipro also jumped 0.8%.
Oracle Financial Services is up slightly. However, Mphasis was the only underperformer to dip slightly.
The G7, which brings together the richest nations in the world, finally came to an agreement on the historic agreement on the global minimum corporate tax. The G7, made up of the US, UK, France, Germany, Italy, Japan and Canada, agreed on Saturday to support the world’s minimum corporate tax rate. at least 15%.
This global corporate tax rate is seen as favorable to tech companies as their future tax obligations have become more predictable. However, the tech giants barely reacted to the development on Monday with shares of Facebook, Amazon.com, Apple, Microsoft and Alphabet, parent company of Google, falling between 0.4% and 0.7%. In addition, the index of European technology stocks was at a moderate level.
Although, overall, tech stocks outperformed major Wall Street indices. The tech-rich Nasdaq Composite closed at 13,881.72 up 0.5% overnight, while the Dow Jones and S&P 500 slipped.
Attention has now shifted to the G20 countries for broader agreement on the new tax proposals. The G20 involves countries like Argentina, Australia, Brazil, Canada, China, European Union, France, Germany, India, Indonesia, Italy, Japan, Mexico, Russia, Saudi Arabia, South Africa, South Korea, Turkey, United Kingdom, and United States.