Mumbai: Shares of leading Indian IT companies surged for a third consecutive session on Monday, with Infosys, Tata Consultancy Services, HCL Technologies and Tech Mahindra emerging as top gainers. The rally reflects a combination of improving global technology sentiment, rising optimism around artificial intelligence (AI) spending, expectations of US rate cuts and support from a weaker rupee.
The Nifty IT index rose 2.8% to 30,680.75, extending its three-day gains to 5.8%. Among frontline stocks, Infosys led with a sharp 4.42% rise, while TCS climbed 3.52%. HCL Technologies gained 2.33% and Tech Mahindra added 1.70%, signalling broad-based buying interest across the sector.
Mid-tier IT firms also joined the rally. Coforge advanced 2.18%, LTIMindtree rose 2.74%, Mphasis gained 2.77% and Persistent Systems added 1.68%. Wipro also traded higher.
The strength in IT stocks provided crucial support to broader indices, with these companies helping offset weakness in banking and consumer sectors on the Sensex.
Global tech sentiment drives momentum
A key trigger for the rally came from the United States, where Snowflake reported stronger-than-expected results and offered an optimistic outlook on enterprise demand. The update reassured investors that spending on cloud computing, software services and AI remains resilient despite global economic uncertainties.
For Indian IT companies, which derive a significant share of revenue from North America, such signals are critical. Positive commentary from global tech firms often indicates sustained outsourcing demand and stable technology budgets among clients.
The development has strengthened investor confidence that the slowdown fears impacting IT spending may be easing, at least in key markets.
AI spending optimism boosts outlook
Another major factor supporting the rally is growing belief that the AI boom is translating into real business opportunities. Investors are increasingly confident that Indian IT firms will benefit from rising enterprise spending on AI-driven solutions.
Opportunities are expected across segments such as cloud migration, data analytics, automation and digital transformation. As global corporations accelerate investments in these areas, Indian service providers are well-positioned to capture a share of the demand.
This shift in sentiment marks a transition from earlier concerns that AI could disrupt traditional outsourcing models to a more optimistic view that it could create new revenue streams.
Rate-cut expectations add to gains
Expectations of a potential rate cut by the US Federal Reserve have also contributed to the rally. Technology stocks typically perform well in a lower interest rate environment, as reduced borrowing costs enhance the present value of future earnings.
The possibility of monetary easing has already fuelled gains in US technology stocks, particularly those linked to AI. The positive trend has spilled over into Indian markets, driving renewed investor interest in IT stocks.
Weaker rupee supports profitability
Currency movements have further strengthened the sector’s outlook. A relatively weak rupee against the US dollar benefits export-oriented industries like IT.
Since a large portion of revenue for Indian IT companies is earned in dollars, a weaker rupee translates into higher earnings in rupee terms. This improves margins and boosts profitability, making the sector more attractive to investors.
Although the rupee has seen some recovery, it remains at levels favourable for IT exporters, continuing to support sentiment.
Attractive valuations draw investors
The rally also reflects a value-buying opportunity. IT stocks had been among the worst performers over the past year due to concerns over slowing growth, reduced client spending and uncertainty around AI disruption.
The Nifty IT index is still down around 19% in 2026 so far, indicating the scale of the earlier correction. Even after the recent rebound, valuations remain relatively attractive compared to historical levels.
As sentiment improves, investors are returning to the sector, betting that the worst of the slowdown may be behind.
Conclusion
The ongoing rally in IT stocks is being driven by a combination of global and domestic factors—strong tech earnings cues, AI-driven optimism, expectations of lower interest rates and currency support. While the near-term outlook appears positive, the sustainability of the rally will depend on continued growth in global technology spending and improved earnings visibility for Indian IT firms.
For now, the sector appears to be regaining investor confidence, positioning itself for a potential recovery after a prolonged period of underperformance.
(Disclaimer: The views, opinions, recommendations, and suggestions expressed by experts/brokerages in this article are their own and do not reflect the views of the Read Group. It is advisable to consult a qualified broker or financial advisor before making any actual investment or trading choices.)
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