The Nifty IT index surged over 4% for the third straight trading session, with the index now rallying nearly 8% in just three sessions. As per The Financial Express, strong buying in major Information Technology counters pushed the sector sharply higher, with all ten constituents trading in positive territory during the latest session. The benchmark indices rebounded up to 1.5% from intraday lows despite concerns over the rupee hitting fresh record lows and crude oil surging above $110 per barrel. The market had crashed sharply earlier during the day, with Sensex tumbling more than 1,000 points and Nifty 50 slipping below 23,350. The crash had wiped off around ₹7 lakh crore from the total market capitalisation of all companies listed on BSE, but bulls made a strong comeback in afternoon trading hours. According to The Hindu BusinessLine, at 12:20 pm, the BSE Sensex was trading at 75,640.32, up 325.28 points or 0.43%, while the NSE Nifty 50 was at 23,747.50, higher by 97.55 points or 0.41%.
Infosys emerged as the top performer, surging 4.04% to ₹1,188.60, leading the sector's strong rally. Tech Mahindra climbed 3.61% to ₹1,481.60, while Tata Motors PV rose 3.30% to ₹364.80. TCS gained 2.61% to ₹2,342.90, and Eternal added 2.58% to ₹247.62, extending the morning's momentum into the afternoon session. Adani Enterprises also gained 2.59% to ₹2,759.50, with HDFC Life Insurance Company rising 1.38% to ₹613.30. On the losing side, Coal India was the biggest drag, falling 1.43% to ₹455.50. Kotak Mahindra Bank declined 1.38% to ₹386.40, while UltraTech Cement slipped 1.33% to ₹11,407. Bharti Airtel dropped 1.06% to ₹1,917.50, and Tata Consumer Products was down 0.78% to ₹1,221.40. The sector's strong performance came despite the India VIX remaining more than 4% higher at 19.63, indicating continued market volatility.
The rally in the Nifty IT index was significantly boosted by the rupee recently slipping to record lows against the US dollar, which is typically positive for IT companies because they earn a significant portion of their revenue in dollars. As per The Financial Express, since Indian software companies earn a large share of their revenue in dollars, a weaker rupee improves earnings realisation once overseas revenue is converted into Indian currency. The currency weakness has provided a much-needed boost to IT stocks, which had been under pressure with the Nifty IT seeing a slump of over 12% in just one month and the sector falling over 22% this year. The strong performance in early trade suggests that investors are viewing the rupee depreciation as a positive catalyst for IT companies' export-oriented business models. However, as per The Hindu BusinessLine, the rupee's weakness near the ₹96 per US dollar mark continues to act as a ceiling on any sharp rally.
Market breadth on the BSE remained positive, with 2,614 stocks advancing against 1,271 declines, while 201 remained unchanged. A total of 74 stocks hit fresh 52-week highs, against 24 touching 52-week lows. Of the 4,086 stocks traded on the BSE, 133 were locked in upper circuits and 128 in lower circuits. The Nifty's Advance Decline Ratio stood at 31:18, indicating that buying remained concentrated in select counters rather than being broad-based. According to SBI Securities, the Nifty is now trading within a defined range, with the 23,600–23,620 zone acting as immediate support and resistance placed at 23,850–23,870. A slip below 23,600 could open the door to the next support band at 23,400–23,300, while a breakout above 23,870 may extend the rally toward 24,070. On the Sensex, support is pegged at 75,200 and resistance at 76,000.
According to Shibani Kurian, Senior Executive Vice President, Fund Manager & Head – Equity Research at Kotak Mutual Fund, as reported by The Financial Express, "The debate around AI and its impact on the sector and the services ecosystem continues. There is no denying that the medium-term opportunity from enterprise AI adoption is real but is unlikely to materialise meaningfully in the very near term." She noted that AI-led deflation is creating a structural revenue and margin headwind as productivity gains are passed through to clients and the competitive intensity remains high. Manish Sonthalia, Director and CIO of Emkay Investment Managers, said "AI is massively disruptive. Growth expectation is getting reset across the sector. Valuations are suggesting the sector is set for zero growth in the best case and or negative growth in the medium term due to AI disruption." However, he added that "AI will definitely change the industry, but Indian IT companies have adapted well to every major tech shift in the past."
Many frontline IT stocks had corrected sharply over the past few months due to weak guidance and macro concerns. The recent decline has made valuations relatively attractive, prompting bargain hunting by investors. As per The Financial Express, the rebound may also be getting amplified by short covering from traders betting against the sector. Short covering in IT stocks means traders who had earlier bet on the sector's decline are now buying back shares to close their positions, especially after the recent rally in the IT pack. The Nifty IT index has corrected 27% on a year-to-date basis, while the Nifty 50 index has declined 9.5% in the same period, with only one stock in the Nifty IT index posting gains in 2026 so far. Another key factor supporting Indian IT stocks is the strength seen in global technology shares, particularly in the United States, with Wall Street technology companies continuing to see strong investor interest. The recovery in sentiment was supported by easing geopolitical concerns after US President Donald Trump confirmed a delay in any potential military action against Iran, with Brent crude, which was trading near $109 a barrel earlier, pulling back.
