- Shares of Indian IT majors TCS, Infosys, and Coforge rose 2-3% in early trade on July 29
- Nifty IT index gained 3% intraday, led by Coforge, Infosys, and Larsen & Toubro
- Indian benchmarks Nifty 50 and BSE Sensex rose 0.9% and 1% respectively on July 29
Shares of leading Indian IT majors such as Tata Consultancy Services Ltd., Infosys, and Coforge gained nearly 2-3% in early trade on Wednesday, July 29, for the second straight session over improving earnings sentiment amid a reverse AI trade in global markets. Renewed brokerage optimism has also sparked broad-based buying across the sector. The Nifty IT index was up 3% intraday, with Coforge leading the rally with gains over 4%, following by Infosys and Larsen & Toubro (L&T).
Indian equity benchmarks rebounded after ending little changed on Tuesday. The NSE Nifty 50 rose 0.9% to 24,203.20 and The BSE Sensex rose as much as 794 points or 1% to 77,559.48. The Nifty IT index led sectoral gains with all IT stocks trading in green during the first hour of trade. Shares of TCS, Infosys, and Coforge gained sharply after the opening bell on the robust earnings momemtum. Shares of LTM gained over 3%, while Persistent Systems, Tech Mahindra, and HCLTech gained nearly 2%.
Nifty IT index extended gains for the second straight session.
The rise in Indian IT stocks comes after the selloff in US technology stocks gathered pace on Tuesday, taking the sector's market value loss to about $1.6 trillion over five trading sessions as investors continued to question heavy artificial intelligence spending, disappointing earnings and rising capital expenditure commitments by the industry's largest companies.
The latest wave of selling pushed the Nasdaq-100 into correction territory during the session, marking a decline of over 10% from its most recent record high. The index, which tracks the 100 largest non-financial companies listed on the Nasdaq exchange, finished the day 1% lower. Chipmakers also bore the brunt of the selloff as concerns over AI-related spending spread across the semiconductor sector.
Shares of Sandisk fell 14%, while AMD, Arm Holdings, Micron Technology and Seagate Technology each dropped more than 8% during the session. Dell Technologies, a major supplier of AI data centre servers, declined 8.1%, while Intel lost 5.8%. The weakness in technology shares also knocked AI chip giant Nvidia from the top spot among the world's most valuable listed companies, allowing Apple to reclaim the position for the first time since April 2025.
Also, global brokerage Jefferies added Infosys to its India model portfolio and shifted its stance on the IT services sector from underweight to neutral, citing easing concerns around the artificial intelligence trade that has weighed on the sector for much of the year. The brokerage's shift follows meetings with more than 50 foreign portfolio investors over the past two weeks, which it said pointed to a broader change in sentiment toward India as the AI trade comes under scrutiny.
Explaining the move, Jefferies said in its note, "As the AI trade pauses, we tactically close out our longstanding IT services UWT." The reversal was triggered by a roughly 30% drop in MSCI Korea on weak memory stock performance, which has raised questions about the sustainability of heavy AI capital expenditure by US hyperscalers. This has prompted several FPIs to reverse or re-evaluate longstanding India underweight positions built up around the AI trade.
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