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IT Shares Extend Gains For Day 2 In Volatile Trade; Key Drivers Behind The Rally
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IT stocks extended their rally for a second consecutive session on Thursday, clearly outperforming a highly volatile broader market
IT Shares
IT Share Price: IT stocks extended their rally for a second consecutive session on Thursday, clearly outperforming a highly volatile broader market. While the benchmark indices, Sensex and Nifty 50, swung sharply in both directions through the day, the IT pack remained resilient.
The Nifty IT index was up about 1.5 percent in afternoon trade, building on its over 1 percent rise in the previous session. With gains spread over two days, the index has now climbed more than 2 percent.
All 10 constituents of the IT index were trading in the green. Coforge led the rally with a gain of 3.19 percent around 1:30 pm, while Persistent Systems followed with a rise of 1.96 percent.
Shares of Tata Consultancy Services were trading at ₹3,230.40 on the NSE, up 1.58 percent and at their highest level in nearly three months. The sharp move came after a report said OpenAI is in advanced talks with the company to set up a large-scale AI compute presence in India and jointly develop agentic AI products for enterprises.
Other IT heavyweights such as Mphasis, Tech Mahindra, HCL Technologies, Wipro and Infosys also advanced, rising as much as 2 percent.
3 key factors behind the rise in IT stocks
1) Weakening rupee: The rupee slipped 28 paise to a fresh record low of 90.43 against the US dollar in early trade. It opened at 90.36 and weakened further amid sustained foreign fund outflows. A softer rupee typically supports IT exporters, which earn a large part of their revenue in dollars, by boosting rupee-denominated earnings and margins.
2) Hopes of a US rate cut: Recent US macroeconomic data have kept expectations alive for a potential rate cut by the Federal Reserve next week. Lower interest rates usually support economic activity and corporate spending, including technology budgets. Stronger IT spending in the US, India’s largest export market for software services, directly benefits domestic IT firms.
3) Positive brokerage commentary: Motilal Oswal said the IT services sector may be nearing an inflection point, with stronger growth likely over the next 6–9 months. The brokerage expects a pickup in the second half of FY27 and broader adoption through FY28 as companies move from pilot projects to full-scale deployment. It also noted that sector valuations are at decade lows despite stable profitability.
Last week, the brokerage upgraded Infosys to “buy” from “neutral”, citing its ability to benefit from rising enterprise AI spending. Mphasis and Zensar were also upgraded to “buy”, while Wipro was revised to “neutral” from “sell”.
Motilal Oswal expects IT services growth to stabilise and strengthen by FY28 as cloud spending normalises. Despite the ongoing rebound, the IT sub-index is still down 12.7 percent on a year-to-date basis, underperforming the broader Nifty 50.
December 04, 2025, 15:07 IST
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