Market Performance
The mood in the Indian stock market turned upbeat today as IT stocks staged a sharp recovery. The Nifty IT index surged more than 2%, with every major constituent trading in the green. Gains in frontline technology companies helped the index outperform the broader market, where sentiment has been mixed in recent sessions.
- Infosys share price: Up nearly 4%
- Wipro share price: Among the top gainers
- Tech Mahindra, LTIMindtree, HCL Technologies, Coforge: Notched strong gains
- Persistent Systems, Tata Consultancy Services (TCS), Mphasis, Oracle Financial Services Software: Also closed higher
This synchronized rally across large-cap and mid-cap IT names highlighted renewed investor appetite in a sector that has underperformed for most of the year.
Infosys Share Buyback Sparks Optimism
Infosys stole the spotlight, emerging as the top gainer in the pack. Its stock climbed almost 4% after the company revealed that its board of directors will meet on September 11 to consider a proposal for a share buyback.
The buyback plan not only buoyed Infosys but also lifted the mood across the IT sector. Market participants saw this as a shareholder-friendly move that could trigger similar actions from other leading technology players.
Company-Wise Highlights
The rally wasn’t limited to Infosys alone. Other big names also saw robust buying:
- Wipro: The second-best performer, reflecting strong demand.
- Tech Mahindra, LTIMindtree, HCL Technologies, Coforge: Witnessed steady gains, signaling broad-based momentum.
- Persistent Systems, TCS, Mphasis, Oracle Financial Services Software: Extended the positive trend, adding further strength to the sector-wide move.
Rupee Depreciation Adds Tailwinds
The Indian rupee’s sharp slide also played its part in boosting IT stock sentiment. The currency breached the ₹88 mark against the US dollar, hitting a fresh all-time low of ₹88.36 last week.
For Indian IT companies, which earn a majority of revenues from overseas—especially the US market—a weaker rupee acts as a natural tailwind for margins. This currency-driven advantage gave traders another reason to bet on the sector.
Broader Sector View
Despite today’s relief rally, the larger picture remains more complex. On a year-to-date (YTD) basis:
- Nifty IT index: Down nearly 19%
- Benchmark Nifty 50: Up about 5%
This underperformance reflects global challenges weighing on Indian IT companies.
Some of the key concerns:
- Soft global tech spending: Clients cutting discretionary budgets
- Slower deal ramp-ups: Delays in execution of large contracts
- Shift to new priorities: Companies pivoting to AI, cloud, and cost-optimization
The buyback announcement and rupee weakness may have provided short-term relief, but long-term growth visibility for the sector still depends on global demand recovery.
US Tariffs Loom as Headwinds
Another risk clouding the sector is the potential US tariffs on software exports. With giants like TCS, Infosys, HCL Technologies, and Wipro deriving more than 60% of their revenue from the US, any such move could deal a significant blow.
Compounding the challenge are:
- Visa restrictions: Raising operational costs
- Need for local hiring in the US: Potentially impacting margins
- Double taxation risks: Since Indian IT companies already pay substantial US taxes
These structural headwinds mean the sector’s recovery remains fragile, even as short-term triggers fuel market rallies.
Summary
The rally in IT stocks today was driven by two key catalysts—Infosys’ buyback proposal and the rupee’s depreciation against the US dollar. Infosys led the surge with nearly a 4% jump, followed closely by Wipro and other heavyweights like Tech Mahindra, HCL Technologies, LTIMindtree, and Coforge.
While today’s gains lifted market sentiment, the Nifty IT index is still down 19% YTD, underscoring the sector’s ongoing challenges. Rising risks from potential US tariffs, weak global tech spending, and currency volatility continue to shape the road ahead for India’s IT giants.
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