The Nifty IT index gained almost 1% to rise to the day's high of ₹29,177.80 apiece, with all index constituents trading in positive territory. According to reports from Mint, the IT pack had risen 4.31% last week, though it remains flat with a negative bias for the month so far. Technology stocks witnessed fresh buying on Monday, 25 May, building on gains from the previous week as investors resorted to lower-level buying and amid shifting sectoral preferences due to a weakening Indian rupee. This comes as the broader market faces challenges, with the Nifty 50 index having slumped by over 8% while the Nifty Metal index has emerged as the leading sectoral performer with an 18% rally, adding ₹1.6 lakh crore to investor wealth.
Oracle Financial Services Software (OFSS) emerged as the top gainer in the index, rising over 3% to ₹9,834 apiece on the NSE. As reported by Mint, Wipro followed with gains of over 2% higher following the announcement of its buyback record date last week on Friday. Other notable performers included Mphasis, Persistent Systems, Tech Mahindra, Coforge and TCS, which traded between 1-2% in the green. HCL Technologies, Infosys and LTIMindtree also rose but less than 1% each.
The rebound in IT stocks can be attributed to the sharp depreciation in the Indian rupee and value buying after heavy selling in the first quarter of the calendar year. According to Mint, a stronger dollar raises expectations of better profit growth for companies that earn a large share of revenue in the greenback. Sankaran Naren of ICICI Prudential AMC described the current setup as a 'contrarian valuation call' while acknowledging that the industry still faces genuine disruption risks from AI. Despite the recent gains, the Nifty IT index remains the worst-performing sector on NSE, having lost over 22% so far this year amid fears of AI-led disruption for the labour-intensive Indian IT services sector.
Prominent market investors continue to find opportunities in IT even as broader sentiment towards the sector remains cautious. As reported by Mint, Rajeev Thakkar of PPFAS Mutual Fund pointed out that Indian IT companies have repeatedly survived existential concerns over the past three decades. According to Thakkar, the industry has historically adapted to technological change rather than being displaced by it, drawing parallels with industries such as telecom and discount broking where lower costs can lead to higher overall consumption according to Jevons' Paradox principle.
