Nifty IT Climbs Nearly 2 Per Cent, Snaps Two Session Losing Streak - Know Why

Nifty IT Today: Domestic IT sector stocks rebounded on May 29, 2025 after declining for two consecutive sessions. The Nifty IT index also snapped a two-session losing spree as it gained nearly 2 per cent to hit a high at 38,121.40. The index closed higher by 0.77 per cent at 38,121.4.Nine constituents of the Nifty IT index advanced, while Tata Consultancy Services shares bucked the trend to close in the red.

Persistent, Coforge and Mphasis Emerge As Top Gainers

IT stocks gained after Nvidia posted strong Q1 results. Additionally, a US Court blocking US President Donald Trump’s ‘Liberation Day’ tariffs also boosted investor sentiment on D-Street. Shares of Persistent, Mphasis, and Coforge gained the most as they closed higher by up to 2.74 per cent. Shares of Coforge surged over 2.74 per cent to an intra-day high of Rs 8,699 apiece on the NSE.

The gains made by Nifty IT heavyweights further buoyed the index. Notably, shares of Nifty IT heavyweights, such as Infosys, HCL Technologies, and Tech Mahindra traded higher by up to 1.37 per cent at the time of writing.

Shares of other constituents of the 10-share index, such as Wipro and LTI Mindtree, closed higher by up to 1.25 per cent on the NSE.

Why Are Nifty IT Stocks Gaining

On May 28, 2025, the Court of International Trade stated in its ruling that the use of tariffs as leverage is ‘impermissible’. Earlier this year, US President Donald Trump announced sweeping reciprocal tariffs on all its major trade partners. Notably, the Trump administration has filed an appeal against the Court of International Trade’s order. Following the ruling, US stock futures surged and the US dollar strengthened as the market factored in the development.

“The court does not pass upon the wisdom or likely effectiveness of the President’s use of tariffs as leverage. That use is impermissible not because it is unwise or ineffective, but because [federal law] does not allow it,” the court said.

Ajit Mishra – SVP, Research, Religare Broking Ltd told Outlook Money that IT stocks gained in today’s trade on account of several positive cues such as Nvidia’s upbeat results and the US court ruling.

"Indian IT companies derive a significant portion of their revenue from the U.S. market, and favorable cues—such as upbeat results from chipmaker Nvidia and the U.S. court ruling on tariffs—helped ease the pressure following two days of decline. These developments have raised hopes among participants that recessionary fears may subside, potentially triggering a further rebound,” Mishra said.

Shares of domestic IT companies gained in today’s trade as the US is a key territory for them and makes up a significant part of their revenue. The likelihood of tariff imposition facing a hurdle has buoyed investor sentiment. Since domestic IT companies earn in dollars, they are likely to benefit from the strengthening of the currency.

Other key triggers for today’s rally were the announcement of semiconductor chip manufacturing giant Nvidia’s first-quarter results. The chipmaker’s revenue surged 69 per cent on a year-on-year (y-o-y) basis to $44.1 billion. Notably, the company has managed to beat the Wall Street estimate of $43.28 billion.

Nvidia’s results are crucial, as they act as a verdict on the future of the boom in artificial intelligence (AI). On the other hand, companies that have partnerships with Nvidia can also potentially benefit from the company’s performance. Notably, Nvidia has partnerships with domestic IT giants such as Infosys and L&T Technology and conglomerates such as Reliance Industries and the Tata Group.

Mishra urged investors to remain watchful of major events such as  the upcoming U.S. GDP data and other tariff related developments.

“Going forward, investors should remain watchful of the upcoming U.S. GDP data and any developments related to tariffs and trade talks for further cues," Mishra said.