Indian IT stocks experienced a significant rebound this week, with the Nifty IT index gaining 4.3% - the best weekly performance since October 2025. This rally followed a sell-off in Asian AI and semiconductor stocks, creating a relief rally in the sector. The benchmark Nifty gained 0.52% this week, with the BSE Sensex climbing 582.06 points (0.75%) as reported by The Hindu BusinessLine. Investor concerns eased after first-quarter earnings from major IT companies showed little evidence of AI-related disruption, prompting some short-covering in the sector. The broader market showed mixed performance with the Nifty Smallcap 250 down 0.89% and the Midcap 150 declining 0.52%, while market breadth remained positive with most sectors trading in the green, led by Realty which gained over 1%.
Information technology stocks witnessed sustained buying demand for the third consecutive trading session, with the Nifty IT index jumping 1.26% to 29,084.75 after gaining 1.89% in the past three consecutive sessions. Tech Mahindra led the rally, surging 2% on the back of strong earnings, while Infosys advanced 1.62%. Tata Consultancy Services rose 1.48%, and Persistent Systems climbed 1.24%. All the 10 constituents of the Nifty IT index were trading in the green, with other major gainers including LTIMindtree up 0.89% and Mphasis surging 0.5%. The rally was driven by renewed buying in large-cap IT stocks, making the index the best-performing sector for three consecutive days.
The combined market valuation of five of the top-10 most valued firms jumped ₹1.54 lakh crore last week, with IT major TCS emerging as the biggest winner. As per The Hindu BusinessLine, TCS added ₹72,072.3 crore, taking its market valuation to ₹8,20,672.70 crore. The country's largest IT services company reported a 4.61% increase in its June-quarter net profit to ₹13,349 crore, and guided towards an improvement in demand, impacted by the West Asia crisis, returning in the ongoing quarter. ICICI Bank's valuation surged ₹29,062.06 crore to ₹10,34,441.77 crore, while Reliance Industries' market cap jumped ₹23,884.93 crore to ₹17,95,091.26 crore. Bajaj Finance climbed ₹21,946.5 crore to ₹6,57,274.28 crore, and State Bank of India went up by ₹7,338.34 crore to ₹9,63,768.78 crore.
The IT sector's outperformance was significantly boosted by better-than-expected quarterly results from sector heavyweights. TCS reported a net profit of ₹13,349 crore for Q1FY27, up 4.6% from ₹12,760 crore in the year-ago period, while revenue grew 13.9% in reported terms to ₹72,275 crore compared to ₹63,437 crore for Q1FY26. Sequentially, the firm's revenue was up 2.2% and 0.4% in constant currency terms. HCLTech reported a 20.3% increase in net profit to ₹4,624 crore on a year-on-year basis, with revenue up 13.9% to ₹34,579 crore for the quarter. ICICI Prudential AMC and Nuvoco Vistas both posted around 20% profit growth, while HCLTech also announced plans to invest ₹3,500 crore to enter the AI data centre business, with potential to scale it up to 50 MW capacity.
The recovery in IT stocks was supported by three primary factors that drove investor confidence. Earnings in focus emerged as a key driver, with Tech Mahindra rising 2% ahead of its earnings scheduled to be announced after market hours. Reliance Industries made the biggest contribution to Nifty's gains, adding 31.97 points and gaining almost 2% ahead of its quarterly results. Financial stocks provided strong support, with HDFC Bank contributing 28.66 points, ICICI Bank at 17.78 points, Infosys at 15.15 points, and State Bank of India at 9.95 points. Additionally, softer US inflation data strengthened expectations that the US Federal Reserve could adopt a less aggressive monetary policy stance in coming months, which is positive for India's $315-billion IT industry as lower interest rates improve business confidence and technology spending by American companies. As per Religare Broking Ltd, sentiment remained supported by encouraging Q1 FY27 earnings from the IT sector, renewed buying interest in financial stocks, and resilience in domestic economic fundamentals.
