Nifty IT Closes Higher, As All Other Sectoral Indices End In Red - Here's Why

Amid a weak market, the Information Technology (IT) stocks traded higher, bucking the trend. The Nifty IT index, which tracks top 10 IT stocks listed on the National Stock Exchange (NSE), was the only sectoral index which ended the day in the green, while all other major sectoral indices ended with deep losses.

The IT index closed 0.72 per cent higher, led by gains in Mphasis, Persistent Systems, Coforge and index heavyweights Infosys, Tata Consultancy Services (TCS) and Tech Mahindra.

Meanwhile, the headline indices – Sensex and Nifty 50 – tumbled as much as 1.5 per cent oin today’s trade. At close, Sensex ended the day at 79,212.53, down 588.90 points, or 0.74 per cent. Nifty 50 closed at 24,039.35, with 207.35 points, or 0.86 per cent in red. The overall market was under pressure as investor sentiments were weighed down due to escalating tensions between India and Pakistan.

Notably, on April 22, a group of terrorists opened fire on tourists in Pahalgam, Kashmir, killing at least 26 innocent lives. Following that, India suspended the decades-long Indus Waters Treaty with Pakistan, to which Pakistan announced several retaliatory measures including putting on hold the 1972 Simla Agreement and closing its airspace for Indian airlines.

Why Nifty IT Bucked The Trend

According to Ajit Mishra – SVP, Research, Religare Broking: "Indian IT stocks outperformed in an otherwise weak market, buoyed by hopes of US rate cuts and a rebound in global tech sentiment."

Sumit Pokharna, VP-Fundamental Research, Kotak Securities, mirroring his view, said: “The IT index is positive mainly on account of the rally in the US tech stocks and the expectation of a rate cut by the fed in the June meeting.”

The tech-heavy Nasdaq Composite index yesterday rose 2.74 per cent on indications of easing trade tensions between US and China. China called for cancellation of US tariffs on Chinese goods after signs emerged that the US may de-escalate its trade war.

Mishra also added, "With a large share of revenue coming from overseas clients, especially in the US, IT companies are seen as relatively insulated from local geopolitical risks."

Mphasis Share Price Rises After Q4 Results

Mphasis share price jumped 2.86 per cent to Rs 2,538.60 apiece on the NSE after the IT services firm reported its fourth quarterly (Q4 FY25) results today. Its net profit for the quarter under review came in at Rs 446.5 crore, a 4.3 per cent jump from Rs 427.8 crore profit reported in the previous quarter and a 13.5 per cent growth from Rs 393.2 crore against last year’s corresponding quarter.

The IT firm’s revenue for Q4 rose to Rs 3,710 crore, up 4.2 per cent quarter-on-quarter (QoQ) from Rs 3,561.3 crore and up 8.7 per cent on a year-on-year (YoY) basis from Rs 3,412 crore.

The company’s Board also declared a dividend of Rs 57 per share for the fiscal year ended March, 2025.

Tech Mahindra Share Price Gains After Q4 Results

Tech Mahindra’s share price, which initially tumbled as much as 5 per cent in early trade, recovered sharply to settle the day higher by 1.16 per cent. The fall in its shares came on account of its Q4 results. However, investors took this opportunity to lap up its shares.

Nuvama Institutional Equities, in a note, said, Tech Mahindra reported revenue of $1,549 million, which reflects a 1.5 per cent QoQ decline in constant currency terms—worse than their expected decline of 0.7 per cent. However, EBIT margin improved by 40 basis points to 10.5 per cent, surpassing their estimate of 10.2 per cent. Profit after tax (PAT) came in at Rs 11,600 crore, in line with expectations. Total contract value (TCV) was strong at $798 million, a 7 per cent jump QoQ and a 60 per cent rise YoY.

Nuvama noted that while Tech Mahindra's performance has been gradually improving, especially in deal wins and margin expansion, sustaining this momentum may be challenging due to the weak macroeconomic environment.