Nifty IT Jumps 5% - What Triggered Rally In HCL Tech, TCS And Other IT Stocks

Indian IT stocks opened higher on October 13, with Nifty IT index jumping as much as 4.80 per cent by mid-session, outperforming other sectoral indices. Strong quarterly results from HCL Technologies and fresh optimism around artificial intelligence (AI)-led business growth attracted buyers into the sector. The buying in IT stocks came even as Asian technology stocks faced selling pressure.

TCS led the gains among major IT companies, rising 5.12 per cent to Rs 2,233.70. HCLTech shares advanced 3.70 per cent to Rs 1,268.20, while Tech Mahindra gained 2.75 per cent to Rs 1,511.40. Infosys was up 2.08 per cent at Rs 1,041.25.

HCLTech's quarterly earnings, growing artificial intelligence (AI) revenue and strong deal wins helped improve investor sentiment towards Indian IT services companies. Investors are looking for signs that spending on AI will translate into sustained revenue growth and stronger business prospects for the sector.

The gains came even as global technology stocks remained under pressure over concerns about high AI valuations, rising capital expenditure and whether the pace of AI-driven growth can justify the money being invested in the technology.

For Indian IT services firms, the global selloff also raises a broader question about competition. A reassessment of valuations among AI-focused companies could ease some competitive pressures on traditional IT service providers, although the impact on their business prospects will depend on how enterprise technology spending evolves.

The IT rally also supported the broader market in early trade. At 9:53 am, the BSE Sensex was trading 605.16 points, or 0.84 per cent, higher at 72,529.84. The NSE Nifty 50 rose 185.85 points, or 0.83 per cent, to 22,549.20.