IT Stocks Rebound As Nifty IT Index Climbs Over 2%

Information technology shares recovered on Friday after witnessing sustained selling pressure over the previous four trading sessions, helping the Nifty IT index emerge as the top-performing sectoral gauge during the session.

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The Nifty IT index surged 2.75% intraday to settle at 28,114.10, with all its 10 underlying equities gaining ground. The rally came after a sharp correction in previous sessions that drove the index to its lowest point since May 2023.

Persistent Systems led the gains among index constituents, rising more than 3%. Infosys advanced 2.79%, while Tech Mahindra gained 2.31% during intraday trade.

Shares of Tata Consultancy Services, LTIMindtree, Wipro, and HCL Technologies also moved higher, recording gains ranging between 1% and 2%.

Sector Snaps Four-Day Decline

The rebound came after the Nifty IT index declined more than 7% over four consecutive sessions. The index had slipped 0.22% on Monday before witnessing a sharper sell-off from Tuesday onward. On Tuesday alone, the sectoral index dropped 3.7%, extending losses through the week.

Friday’s gains helped the sector partially recover from the recent correction, which had weighed on large-cap and mid-cap IT stocks alike.

The broader market also witnessed buying support during the session, although the IT index outperformed other sectoral benchmarks.

AI Developments Triggered Earlier Sell-Off

The recent weakness in information technology stocks followed developments linked to artificial intelligence investments and deployment capabilities. Market participants had reacted to the announcement by OpenAI regarding a new venture backed by more than $4 billion aimed at helping organisations develop and deploy AI solutions.

The development triggered concerns around automation-led disruption in the global technology services industry. Indian IT companies, which derive a significant share of revenue from overseas clients, especially in the U.S. and Europe, came under pressure amid worries that AI-focused platforms could reduce demand for traditional outsourcing and software implementation services.

Large-Cap IT Firms Recover

Large-cap technology companies contributed significantly to Friday’s recovery in the index. Infosys, Tata Consultancy Services, and HCL Technologies witnessed renewed buying after recent declines. Mid-tier IT firms such as Persistent Systems and LTIMindtree also saw gains during the session.

The Nifty IT index remains among the major sectoral indices on the National Stock Exchange and includes leading software exporters and digital technology firms.

Indian IT companies have been navigating a challenging environment marked by cautious global spending trends, evolving AI adoption models, and slower decision-making by overseas clients.

Friday’s recovery in the sector helped reduce part of the losses recorded earlier in the week, although the index continues to trade below levels seen before the recent sell-off began.