Indian IT Stocks Today: Indian IT stocks rebounded sharply on Tuesday, with the Nifty IT index rising 3.66% to 29,981.05 in early trade. The index touched an intraday high of 30,435, translating into a 5.23% gain from its previous close of 28,921.50.
Among individual stocks, Mphasis led the gains, climbing as much as 7.24% intraday, followed by HCL Technologies, L&T Technology Services and Tech Mahindra, which also gained more than 6% at their respective intraday highs.
The rally in Indian IT stocks came despite a decline in US markets overnight, where selling pressure was concentrated in AI-related stocks. Meanwhile, technology giants including Microsoft and Google gained, while Indian IT ADRs also posted strong gains overnight.
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IT Stocks Rally: Mphasis, HCLTech, LTTS Lead
Mphasis touched an intraday high of Rs 2,461.10, up 7.24% from its previous close of Rs 2,295.
HCL Technologies climbed to Rs 1,290, translating into an intraday gain of 6.96% from its previous close of Rs 1,206.10.
L&T Technology Services rose to Rs 4,568.90, gaining 6.88% from its previous close of Rs 4,275.
Tech Mahindra hit Rs 1,633.20, marking an intraday gain of 5.98% over its previous close of Rs 1,541.
Infosys touched Rs 1,097.70, up 5.78%, while TCS climbed to Rs 2,322.40, marking an intraday gain of 5.52%.
Persistent Systems rose to Rs 5,759, up 4.41%, while Wipro touched Rs 173.35, gaining 3.55% from its previous close.
Oracle Financial Services Software (OFSS) hit Rs 12,099, up 2.86%, while Coforge touched Rs 1,893.60, gaining 2.55% from its previous close.
Why Are IT Stocks Rising Today?
Attractive Valuations
Kranthi Bathini, director of equity strategy at WealthMills Securities, said the rise in IT stocks comes despite weakness in US markets, which was largely driven by the downtrend in AI-related stocks.
“IT stocks were up despite the weakness in US markets, which was largely driven by the downtrend in AI-related stocks. At the same time, companies such as Microsoft and Google gained, while Indian IT ADRs also saw strong buying overnight. This suggests that the weakness is not broad-based across technology.”
“More importantly, valuations of Indian IT companies have become attractive after the recent correction and are now below their historical valuations. At these levels, the sector offers a favourable risk-reward, particularly if the concerns around AI-led disruption and global technology spending start to ease,” Bathini said.
AI Concerns Weigh On US Tech Stocks
The weakness in US markets overnight was concentrated in AI-related stocks, as investors continued to assess concerns around the pace of AI investment, potential disruption to traditional technology services and the sustainability of elevated valuations across parts of the AI ecosystem.
The Nasdaq Composite fell 0.56%, while the S&P 500 declined 0.48% on Monday, with AI and semiconductor stocks facing selling pressure.
At the same time, the weakness was not uniform across technology. Microsoft and Google gained, while Indian IT ADRs also moved higher overnight.
The debate around the pace of AI development has also intensified after Anthropic CEO Dario Amodei called for a slower development of frontier AI models. US President Donald Trump, meanwhile, pushed back against calls for greater AI regulation and concerns surrounding the rapid expansion of data centres.
Trump criticised fears surrounding AI and data-centre development, describing concerns that AI could take over and destroy the world as a “hoax” and defending continued US investment in the technology.
Indian IT ADRs Gain Overnight
Indian IT stocks also received a positive cue from their US-listed ADRs, which gained sharply in overnight trading.
Wipro ADRs rose 5.33% to $1.78, while Infosys ADRs climbed 4.79% to $11.60.
The strong performance of Indian IT ADRs provided an additional positive cue for domestic IT counters at the open, even as broader US markets ended lower amid selling pressure in AI-linked stocks.
US Fed Decision Due Tomorrow
The US Federal Reserve's monetary policy decision will be another key trigger for global technology stocks and Indian IT companies. The two-day FOMC meeting concludes on Wednesday, September 16, with the rate decision due at 2 PM ET, or 11:30 PM IST, followed by Fed Chair Kevin Warsh's press conference.
Market expectations have turned more hawkish after recent inflation data. A Reuters poll on September 14 showed a majority of economists expecting the Fed to raise rates on Wednesday, reversing an earlier consensus for no change.
For Indian IT companies, the Fed outcome will be important because a higher-for-longer interest-rate environment could influence US corporate spending and technology budgets, while a less hawkish policy signal could provide relief to global growth and technology stocks.
The Fed's rate decision and forward guidance will therefore be closely watched alongside US technology spending trends, particularly as investors assess whether the current IT sector rebound can sustain beyond Tuesday's sharp recovery.
IT Stocks: What Investors Should Watch
The immediate focus for the sector will be whether the rebound extends beyond a one-day recovery following the recent correction.
Investors will continue to track US technology spending, discretionary IT budgets, deal wins, currency movement and the potential impact of generative AI on traditional IT services.
The Fed's policy decision and its guidance on the path of interest rates will also remain crucial for the sector. A more hawkish stance could keep pressure on US technology spending and valuations, while any indication of a less aggressive rate trajectory could support risk appetite.
With Indian IT valuations having corrected and moved below historical averages, analysts see an improved risk-reward profile for the sector. However, the sustainability of the recovery will ultimately depend on global technology demand, US spending and how the industry navigates AI-led disruption.
Last checked, Nifty IT was up 3.66%, with HCLTech (+5.75%), Infosys (+4.35%), TCS (+4.25%), LTIMindtree (+4.37%) and Tech Mahindra (+4.77%) among the stronger movers. Coforge was the only stock in the displayed basket trading lower, down 2.94%.
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