Nifty IT Surges 2 Per Cent Tracking Gains In Nasdaq - Know Why Domestic ITeS Shares Gained

Nifty IT Today: The Nifty IT index surged over 2 per cent to an intraday high of 37826.4 level on May 23. The index also emerged as on the top sectoral gainers as it closed 0.95 per cent higher. The surge came amid an overall positive trend in the benchmark Nifty which closed nearly 1 per cent higher. The Nifty IT also tracked the gains made by the Nasdaq Composite index which closed higher by 0.28 per cent.

Persistent, Infosys, LTI Mindtree Emerge As Top Nifty IT Gainers

Shares of Persistent, Infosys and LTI Mindtree gained the most among constituents of the Nifty IT index. Shares of Persistent Ltd gained the most as they closed higher by 1.53 per cent at Rs 5,683 apiece on the NSE. Earlier today the stock climbed nearly 3 per cent to hit a high of Rs 5,733 apiece. Other major gainers such as Infosys and LTI Mindtree also gained over 2 per cent each to trade at their respective highs of Rs 1587.2 apiece and Rs 5,085 apiece on the NSE.

The gains made by the top-constituents of the Nifty IT index in terms of weightage such as Infosys, Tata Consultancy Services, HCL Technologies, Tech Mahindra Ltd and Wipro Ltd closed higher by up to 1.2 per cent at the time of writing.

Why Is Nifty IT Gaining

The tech-heavy Nasdaq Composite closed higher following a decline in US Treasury Yields. Notably tech stocks such as Tesla, Alphabet, Microsoft, Nvidia and Amazon and Meta Platforms and Broadcom closed to 2 per cent higher. The Nifty IT index also tracked the gains made by tech stocks in the US. The rise came after long-term treasury yield bonds slipped on May 22 with the 30-year bond yield tumbling 3.7 basis points to 5.0521 per cent and 10-year bond yield fell to 4.551 per cent. Typically bond yields move inversely to stock prices and stocks tend to gain as interest rates on bonds decline.

On the other hand, the US also released its S&P Global Flash US Manufacturing PMI data. The American S&P Global Flash US Manufacturing PMI grew to 52.3 in May 2025 from 50.2 in April and exceeded the forecasts of 50.1. Notably the current PMI signals an improvement in business conditions. Strong US PMI data can potentially lead to an increase in US dollar values. Since domestic IT companies cater heavily to the US market an improvement in the US dollar can potentially increase revenues.

Ravi Singh, Senior Vice President of Retail Research at Religare Broking Ltd told Outlook Money that the Nifty IT index has continued its momentum in today’s trade. He added that a decline in US treasury yields is likely to have increased the appeal of growth-oriented sectors like IT and the US Fed’s decision to keep interest rates steady has also added to the gains made by IT stocks today.

“A decline in the U.S. Treasury yields has enhanced the appeal of growth-oriented sectors like IT, as lower yields reduce the discount rate for future earnings, making tech stocks more attractive to investors. The U.S. Fed’s decision to keep interest rates steady has also benefited domestic IT stocks, which derive a significant portion of their revenue from U.S.-based clients,” Singh said.

Singh also mentioned that gains made by the IT stocks come in the backdrop of a tough March quarter through which IT companies have remained resilient by securing strong deal wins.

“India’s leading IT companies have concluded a tough January-to-March quarter (Q4FY25), with all four major players — Infosys, TCS, Wipro, and HCLTech — experiencing sequential drops in revenue. The overall macroeconomic environment also became unfavourable during the second half of the year. Despite this, leading firms have demonstrated resilience through strong deal wins,” Singh added.

How Can Investors Trade In IT Stocks

Singh told Outlook Money that investors should closely track the US Federal Reserve policy signals as IT firms are heavily influenced by such global cues.

“IT firms are heavily influenced by global macro factors, particularly U.S. economic data and interest rates. Investors should closely monitor key events scheduled for next week, such as the release of the US GDP report and the US Federal Open Market Committee (FOMC) meeting minutes,” Singh said,

Singh also said that investors can consider deploying a buy-on-dips approach for select stocks.

“On the technical side, investors are advised to adopt a buy-on-dips approach for stocks that are trading above their key moving averages, specifically the 20-day and 50-day averages for short-term positions,” Singh said.

“Additionally, diversifying an IT portfolio across large-cap, mid-cap and small-cap stocks can help reduce stock-specific risk and capture broader sector trends,” Singh said.