Information technology stocks rebounded sharply on July 2, with the Nifty IT index surging more than 3 percent after four consecutive sessions of losses, as investors returned to beaten-down sector heavyweights despite mixed cues from global technology markets.
At 9:20 am, the Nifty IT index was up 3.10 percent, making it the best-performing sectoral index on the NSE. The benchmark Nifty 50 gained 0.41 percent.
The recovery was led by frontline IT companies, which dominated the list of Nifty gainers. Infosys shares climbed 3.9 percent, HCLTech stock advanced 3.4 percent, Tata Consultancy Services rose 2.6 percent and Tech Mahindra gained 2.3 percent to emerge as the top four gainers on the benchmark index. Wipro also traded higher, taking the tally of IT stocks to five among the top 10 Nifty gainers.
The buying was equally broad-based in the mid-cap space. Coforge rose 3.8 percent, while Mphasis, Tata Technologies, Tata Elxsi and Persistent Systems gained between 2.7 percent and 3 percent, with five IT companies featuring among the top gainers on the BSE Midcap index.
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The rebound comes a day after the Nifty IT index extended its losing streak to four sessions, reflecting bargain buying after the recent correction. The sector had been under pressure amid concerns over slowing discretionary technology spending, persistent macroeconomic uncertainty and the long-term implications of artificial intelligence for traditional IT services business models.
Speaking to CNBC-TV18, Abhishek Pathak of Motilal Oswal Financial Services said he remains constructive on the IT sector from a medium-term perspective, with channel checks indicating healthy demand for AI implementation projects. However, he cautioned that IT stocks could still witness meaningful valuation de-rating if demand recovery and earnings growth fail to materialise.
The gains in Indian IT stocks came despite a weak overnight performance by global technology shares. US equities ended marginally lower on Wednesday as technology stocks came under pressure, with the Philadelphia Semiconductor Index slumping 6.3 percent amid concerns over elevated valuations and heavy AI-related capital expenditure. While an 8.8 percent rally in Meta Platforms helped limit losses on Wall Street, semiconductor stocks remained under pressure.
Asian technology shares also weakened on Thursday, with South Korean chipmakers SK Hynix and Samsung Electronics falling sharply as investors rotated out of semiconductor stocks following a strong quarterly rally.
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