Nifty IT logs best run in a year at 4%; TCS, Infosys lead way

Mumbai: Domestic IT stocks extended rally for the third straight session on Tuesday, driving the Nifty IT index to its biggest single-day gain in a year. Analysts said the index’s chart structure remains constructive, signalling continued positive momentum in the near term.

The Nifty IT index ended 4.2% higher at 31,116.6 on Tuesday, its highest gains since May 2025. The index is up 7.6% in the past three sessions, against Nifty 50’s fall of 1.8%. TCS was the top gainer on Tuesday, up 6.7%, followed by Infosys, HCL Technologies and LTM, which were up 4-6% each.

“Indian IT stocks continue to extend gains, supported by improving global software sentiment and growing evidence that enterprise AI adoption is expanding technology spending opportunities rather than disrupting incumbent service providers,” said Kunal Bajaj, research analyst at Choice Institutional Equities.

Bajaj said other factors like rupee depreciation, strong orderbook and improving outlook for discretionary tech spending, are supporting the current rally in IT stocks.

IT stocks look strong on technical charts too. “The Nifty IT index has formed a bullish hammer pattern on the monthly chart, signalling a trend reversal,” said Ruchit Jain, vice-president, Motilal Oswal Financial Services. “Within the sector, recent moves suggest a mix of short covering in stocks such as TCS and HCL Tech, along with fresh long build-up in Infosys and Coforge over the past three sessions.” Despite the recent rebound, domestic IT stocks have underperformed the broader market in 2026, with the Nifty IT index declining 17.9% so far this year against a 10.1% fall in Nifty 50.

Jain expects the IT benchmark’s up move to extend towards 32,000-32,100, near its April highs. According to Bajaj, tier-2 IT firms have historically gained market share during tech transitions due to their agility. “With valuation premiums cooling, we see better relative risk-reward in Coforge, Persistent Systems and Happiest Minds. Among the tier-one companies, we like Infosys and Tech Mahindra,” he said.