Technology stocks gain on strong US jobs data

Shares of IT companies are trading higher on the back of strong US job data. The job data is closely monitored by the traders as it reflects the economic growth of the country since strong numbers give room to the Fed for interest rate hike.

US nonfarm payrolls increased 215,000 in July slightly below expectation but largely in line with a tightening labour market. Payrolls data for May and June was revised to show 14,000 more jobs created than previously reported.

An interest rate hike by the Fed would boost the return on assets denominated in dollars, making the currency more attractive to foreign investors and thus helping the export oriented technology stocks.

Previously, robust earnings numbers posted by the US-based Cognizant Technology Solutions (CTS) enthused the IT pack. CTS’ quarterly revenue and profit exceeded most analyst expectations and the company also raised its full-year revenue and adjusted profit forecasts for the second time this year.

Among the IT majors, TCS, Wipro, Infosys, HCL Tech, Tech Mahindra, NIIT Tech, 8K Miles and Mind Tree are trading higher between 0.1-2.5%. Meanwhile, BSE IT index is up 0.7%.