Nifty IT Sector Leads Gains as Investors Engage in Value Buying Following Recent Sell-Off

Nifty IT Index Rebounds 1.7% in Early Trade

The Nifty IT index led the top sectoral gainers on Friday, outperforming the broader market despite benchmark indices trading lower. At 9:30 am, the Nifty IT index rose 1.7%, while the Sensex declined 0.4% to 79,696 and the Nifty 50 slipped to 24,671.5.

Several frontline IT stocks featured among the top gainers on the Nifty, with HCLTech and Tech Mahindra shares rising 1.9% each. TCS stock gained 1.5%, Wipro added 1.3%, and Infosys advanced 1.2%.

The rebound comes after a steep correction in IT shares over the past few weeks, with the Nifty IT index falling 0.6% on Thursday and 1.6% over the last three sessions. The broader downtrend has been much sharper over a longer horizon, with the index dropping 14.2% in one month and 21% over the past three months.

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Market participants attribute the rebound to value buying after the recent sell-off and a weaker rupee, which can benefit export-oriented IT companies. The Indian rupee opened at 91.65 per dollar, compared to Thursday's close of 91.60.

The IT sector has been under pressure recently due to concerns about the impact of artificial intelligence on traditional IT services business models. Analysts remain cautious on the sector despite the short-term bounce, highlighting the need for IT companies to adapt their business models to an AI-driven productivity cycle. Global investors remain underweight on Indian IT stocks, closely watching how companies adapt to this shift.