Nifty IT jumps 4% as Infosys, TCS rebound in 2026 rally

Nifty IT rebounds after a four-session slide

IT stocks rebounded sharply after a stretch of declines, with the Nifty IT index surging nearly 4% in a single session as investors returned to the sector. The move followed four straight sessions of losses that had erased around 6.5% from the index. Large-cap names led the recovery, helping the sector outperform a market that had otherwise seen broad weakness across many segments. The rebound also came after a period when the IT pack had been described as the market’s key drag, with every Nifty IT constituent trading in the red during the selloff phase.

The day’s action underscored how quickly sentiment can turn in a sector that is highly sensitive to global cues like US interest-rate expectations, tech spending commentary, and currency moves. While the sector’s near-term momentum improved, the broader context still shows IT stocks have underperformed the market in 2026.

Thursday’s comeback: big names lead the charge

After the extended slide, the Nifty IT index jumped nearly 4% on Thursday. Infosys led the gains, rising over 5%. HCLTech, TCS, and Tech Mahindra advanced in a range of about 2.5% to 4%, pointing to broad participation among frontline counters.

Mid-cap IT also joined the rally, with Coforge, Mphasis, and Persistent Systems posting strong gains. The rebound was notable because it followed a selloff that had been both sharp and broad-based, with the index shedding around 6.5% over four sessions.

What the selloff looked like before the bounce

The rebound came against a backdrop of heavy selling pressure that had pulled IT stocks lower. In that earlier downswing, the Nifty IT index was cited as the worst-performing sectoral index, falling 5% on the day referenced in market commentary. TCS was described as down about 8.5%, while Infosys and HCLTech were both down over 4%. The commentary also noted that every single constituent was in the red at the time.

That kind of sector-wide decline typically reflects risk-off positioning rather than company-specific developments. It also sets the stage for sharp snapback moves when selling pressure eases and investors see a valuation or positioning opportunity.

A stronger follow-through: three-session rally and a one-year high gain

The IT upmove was not limited to one session. In Mumbai trading, domestic IT stocks extended gains for the third straight session on a Tuesday, helping the Nifty IT index record its biggest single-day gain in a year. The index ended 4.2% higher at 31,116.6, described as its highest gains since May 2025.

Over the past three sessions, the Nifty IT index rose 7.6%, while the Nifty 50 fell 1.8% over the same period. On that Tuesday, TCS was the top gainer, up 6.7%, followed by Infosys, HCL Technologies, and LTIMindtree, which gained about 4% to 6% each.

AI demand cues and global tech sentiment

One of the stated drivers behind the rebound was optimism linked to artificial intelligence-led demand. A separate Tuesday session saw the Nifty IT index rise 4.3%, with Infosys and TCS each climbing up to 6%. The move was attributed to optimistic remarks from global tech firms on AI-driven demand and improved revenue prospects for Indian IT exporters.

In another market update, the Nifty IT index gained as much as 3.5% intraday on a Monday and ended up 2.66% as a global AI-linked rally spilled into Indian markets following strong earnings and an AI demand outlook from US-based Snowflake. In that session, Infosys closed up 3.6% at Rs 1,202.5. Tech Mahindra climbed 4% and was cited as the top gainer on the Nifty 50, while TCS gained 1.7%, HCL Technologies added 1%, and Wipro rose 1.1%.

Fed expectations, rupee moves, and rate settings in focus

Apart from AI-related optimism, market participants highlighted macro triggers that matter for IT exporters. US rate-cut expectations and hopes of a rebound in technology spending were described as driving fresh interest in IT stocks. During Monday afternoon trade in one update, the Nifty IT index was up 3.86% at 30,203.80, making it the best-performing sectoral index at that point. Infosys rose 4.62% to Rs 1,214.50, Tech Mahindra gained 4.69% to Rs 1,553.50, and TCS advanced 3.26% to Rs 2,332.60. Wipro and HCLTech were also in the green, up 1.25% and 2.21%, respectively.

Currency also featured as a tailwind in multiple references. A Tuesday rally was linked to a sharp depreciation in the rupee, which generally benefits IT companies that earn in dollars. Separately, the RBI policy backdrop was also noted, with most market participants expecting the benchmark repo rate to remain unchanged at 5.25% and the MPC to retain a neutral stance.

Mid-caps participated as buying broadened

The bounce was not confined to large caps. Persistent Systems, Coforge, LTIMindtree, and Mphasis were repeatedly cited among strong performers. In one Monday update tied to the Snowflake-led AI demand optimism, mid-cap stocks including Persistent Systems surged up to 5%. In another update, Persistent jumped 5.43%, Coforge climbed 5.15%, LTIMindtree gained 4.80%, and Mphasis rose 4.24%.

A separate Tuesday session (19 May) highlighted a three-day bull run of 8% for the Nifty IT index, with the index jumping over 4% to 29,566. That report also noted the index had risen nearly 2.5% on Monday and 1.3% the previous Friday. On that day, all Nifty IT constituents traded in the green, with Coforge up nearly 5% and Infosys and LTIMindtree up over 4%.

Key data points at a glance

Market impact and why the move matters

The rebound helped stabilise sentiment in a sector that had been a key drag during the earlier selloff. Several updates also noted that IT stocks were bucking weakness across most other sectors on certain days, and that telecom was the only index trading in the green in one of the negative sessions.

Still, the longer-run scorecard remains weak: domestic IT stocks have underperformed the broader market in 2026, with the Nifty IT index down 17.9% so far this year versus a 10.1% fall in the Nifty 50. That gap matters for investors evaluating whether the recent rebound is primarily a relief rally or the start of a more sustained re-rating, especially when the catalysts cited include macro variables like rates and currency.

What to watch next

Near-term attention remains on global cues that were repeatedly linked to the rally: commentary on AI-driven demand, signals on US rate cuts, and currency moves. One report also flagged a closely watched US Federal Reserve meeting as part of the backdrop for the Monday rebound.

For domestic policy, expectations around an unchanged RBI repo rate at 5.25% and a neutral stance provide an additional reference point for risk appetite. Investors will also track whether the sector can hold gains given its underperformance in 2026.

Conclusion

IT stocks have staged a strong rebound after a sharp slide, with the Nifty IT index posting sessions of roughly 3% to 4% gains and a three-session rise of 7.6% in one stretch. Large caps such as Infosys and TCS led from the front, while mid-caps like Persistent Systems and Coforge also participated. The rally has been tied to AI-demand cues, rate-cut expectations, and rupee depreciation. The next trigger points remain global tech commentary and rate signals, alongside how the sector trades after its still-weak 2026 performance versus the broader market.