Nifty IT Rises Over 4% From 52-Week Low As Fed Rate Hike Fears Ease

Indian IT stocks staged a broad recovery on Thursday after four straight sessions of selling had pushed, The Nifty IT index ended at 26,965.05 on 2 July 2026, up 1,195.25 points or 4.64%. The index saw gains in large-cap and mid-cap IT stocks.

Coforge led the pack with a 5% jump. Infosys, Mphasis, HCL Technologies and Persistent Systems each gained around 4%. LTI Mindtree and TCS added nearly 3% apiece, while Tech Mahindra, Oracle Financial Services and Wipro also rose, though by smaller margins.

What Triggered The Recovery

The bounce came after US Federal Reserve Chair Kevin Warsh struck a measured tone at a European Central Bank panel in Sintra, Portugal. Warsh said inflation expectations and risks have eased in recent weeks and reaffirmed the Fed's commitment to its 2% inflation target, pushing back against any notion that the central bank would tolerate higher inflation. His remarks were interpreted by markets as reducing the risk of more aggressive rate hikes in the near term.

This matters significantly for Indian IT companies, which earn a large portion of their revenue from North American clients. Rate hikes in the US compress discretionary technology spending, which directly affects demand for IT services. Traders are now pricing in around a 64% probability of a rate hike in September, according to the CME FedWatch Tool.

Investors Rotate Back In

Thursday's buying suggests that much of the sector's near-term worries may already be reflected in current valuations. A steep sell-off in semiconductor stocks has also pushed some investors towards IT services companies, which are viewed as comparatively defensive and better placed to gain from the wider commercial adoption of AI.

There is also growing anticipation that the June-quarter earnings season could shed more light on client spending patterns, new deal wins and AI-linked revenue streams. Investors will be paying close attention to commentary from TCS, Infosys and HCLTech to assess whether technology spending is beginning to stabilise after a prolonged cautious phase.

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While US interest rate uncertainty continues to pose a risk, investors appear to be wagering that Indian IT companies will remain central to global enterprises scaling up AI adoption, a bet that has renewed interest in the sector following its recent decline.