IT Stocks Rally Third Day on Fed Hopes; Jefferies Flags Downside Threat

• Indian IT shares rose for the third consecutive day on December 19, driven by hopes of a US Fed rate cut and Accenture's strong Q1 results.
• US retail inflation moderated to 2.7% in November, fueling expectations of further rate cuts, which could boost discretionary spending and benefit IT firms.
• Jefferies, however, warned of downside risks for Indian IT stocks, citing Accenture's modest FY26 growth forecast (1.5-4.5%) and limited discretionary spending.
• Accenture's maintained 2-5% annual revenue growth guidance, despite a strong Q1, signals ongoing demand uncertainty in the sector.
• While Persistent Systems, TCS, Infosys, and others gained, Coforge, LTI Mindtree, and HCL Tech saw declines.

Why It Matters: Indian IT stocks rally on rate cut hopes, but Jefferies warns of underlying demand uncertainty.