Infosys and TCS Shares Surge 5% as Nifty IT Index Extends AI-Driven Rally

Nifty IT Index Extends Rally, Led by Infosys and TCS Shares

The Nifty IT index continued its upward trajectory on Tuesday, with Infosys and TCS shares showing significant gains of up to 5 percent each, defying weakness in the broader market. Investors remain optimistic about the global artificial intelligence (AI) boom, which is expected to drive stronger demand for IT products and services.

The Nifty IT index rose 3.6 percent to 30,921 in the morning trade, emerging as the top-performing sectoral index. This is a stark contrast to the Nifty 50, which fell 0.5 percent. Almost all other sectoral indices, including banking, energy, FMCG, pharma, and infrastructure stocks, traded in the red.

The gains were led by heavyweight IT shares. TCS stock jumped 4.95 percent to Rs 2,411.2, making it the top gainer on the Nifty 50. Infosys also rose 4.85 percent to Rs 1,260.8. HCL Technologies gained 3.05 percent, while Tech Mahindra advanced 1.9 percent. Wipro traded higher by 0.8 percent.

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The rally was not limited to the top-tier IT companies. In the broader market, Hexaware Technologies climbed nearly 6 percent among BSE Midcap gainers. Other midcap IT companies, such as LTIMindtree, Mphasis, KPIT Technologies, Tata Elxsi, Coforge, and Persistent Systems, rose between 2.5 percent and 4.5 percent.

The sector's strength follows a sharp rally on Monday, when the Nifty IT index climbed 2.7 percent after strong earnings and an upbeat AI demand outlook from US-based cloud data platform company Snowflake.

Investor confidence received another boost overnight after Wall Street technology shares advanced, pushing the Nasdaq and S&P 500 to fresh record highs. The software services index in the US gained more than 4 percent, with companies such as ServiceNow and IBM rising as much as 9 percent.

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Software stocks have been recovering from concerns earlier this year that artificial intelligence could disrupt traditional technology business models. Instead, recent corporate commentary has increasingly suggested that AI is creating new demand opportunities across software, cloud computing, and enterprise technology.

Nvidia's comments highlighting the growing role of software in enabling AI adoption have further supported sentiment. The company has also unveiled a new processor aimed at bringing artificial intelligence capabilities to personal computers, reinforcing expectations that AI-related spending could remain a powerful growth driver for the technology sector.