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IT stocks add $30 billion in a week as Nifty IT logs biggest weekly gain in 18 years

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IT stocks add $30 billion in a week as Nifty IT logs biggest weekly gain in 18 years

A pullback in AI-related stocks globally and better-than-expected results from India’s software giants helped the Nifty IT index emerge as the best-performing sectoral index of the week, reviving investor confidence in the battered sector.

The IT gauge rallied nearly 12% during the week, recording its biggest weekly gain in 18 years. The sharp rebound helped the index outperform other sectoral indices. Until Wednesday, the Nifty IT index had been the worst-performing sectoral gauge this year. The latest rally has narrowed its year-to-date decline to 16%, although it remains better placed than the Nifty FMCG index, which is down nearly 20% so far this year.

The Nifty IT index gained another 4% on Friday to close at 31,924, its highest level in eight months.

The rally added nearly $30 billion to the combined market capitalisation of the top 10 IT companies during the week, with Tata Consultancy Services (TCS) alone accounting for $13.3 billion of the increase. Infosys added around $7 billion, while HCL Technologies saw its market value rise by $5.3 billion.

The rebound gathered momentum after TCS reported its quarterly results. Concerns over AI-related valuations and growth projections also helped improve sentiment towards the battered sector.

There were encouraging signals from other IT companies as well. HCL Technologies raised the lower end of its full-year revenue growth guidance, while Tech Mahindra reported strong deal wins and accelerating revenue growth in the September quarter.

5% on Friday, marking their biggest single-day gain since March 2020. At least four brokerages, including Morgan Stanley and Jefferies, upgraded the stock, citing robust demand for AI-led services and the ramp-up of large deals.


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