Indian IT Stocks Defy Global Tech Selloff As Nifty IT Hits One-Month High; Infosys, TCS & HCLTech Gain Over 3% Each
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The Nifty IT index climbed around 2% on 15 October, taking its three-session gain to about 8%, with TCS, HCLTech and Infosys rising around 3% each. The rally came amid a global correction in AI stocks and renewed focus on foreign fund flows into Indian equities.
Indian information technology (IT) stocks moved higher on Thursday even as technology shares across Asia and the US came under pressure. The Nifty IT index climbed around 2% on 15 October, extending its gains over three sessions to roughly 8%.
The index touched 30,856.90, its highest level in more than a month. Infosys, Tata Consultancy Services (TCS) and HCLTech gained around 3% each, while Tech Mahindra rose 3.5%. Wipro was up 1.7%. Oracle Financial Services Software was the only stock in the Nifty IT index trading lower.
At 11:06 AM, Nifty IT traded at 30,762.35, up 1.96%. At the same time, the Infosys share price on the National Stock Exchange (NSE) stood at ₹1,113.95 apiece, up 2.39%. TCS and HCLTech shares were trading for ₹2,362.00 (up 2.48%) and ₹1,372.60 (up 3.44%), respectively.
HCLTech, TCS Results Support IT Shares
Recent earnings from HCLTech and TCS have helped improve sentiment towards Indian IT companies. Their results have drawn buyers back to the sector after months of concern about the impact of artificial intelligence (AI) on traditional IT services.
The rally also came as AI-linked stocks fell sharply in other markets. The correction in chipmakers and companies building AI infrastructure appeared to offer some support to Indian IT shares, which have faced questions about whether AI could threaten their existing business models.
The contrast was clear on Thursday: Indian IT stocks advanced while several Asian markets fell under pressure from technology shares.
AI Stock Correction Puts Foreign Fund Flows In Focus
The global sell-off has raised a question for Indian markets: could money flowing out of AI stocks return to other emerging markets, including India?
As per market experts, the correction in AI stocks could support Indian equities. Foreign institutional investors (FIIs) have been selling Indian shares while increasing their exposure to AI-linked stocks. A shift in this trend could help improve foreign fund flows into the domestic market.
However, a reversal is not guaranteed. Foreign investment flows will depend on global market conditions and investor appetite for Indian equities.
Market experts also believe that any changes to long-term capital gains (LTCG) taxation in the upcoming Budget could support market sentiment. Meanwhile, strength in IT stocks following recent earnings and expectations of healthy second-quarter results from financial companies could help the broader market remain resilient.
Global Tech Shares Fall On Inflation Concerns
The decline in AI-linked stocks extended across Asia after technology shares fell on Wall Street overnight. The MSCI Asia Pacific equities gauge dropped 3.1%, putting it on course for its lowest close since July.
South Korea's Kospi index, which has been closely linked to the AI trade, fell 8% and triggered a trading halt. Samsung Electronics and SK Hynix both lost around 10%, adding to the pressure on regional markets.
US stock futures also pointed to further weakness in technology shares, with Nasdaq 100 futures down 1.1%. European stock futures indicated a lower opening as investors reassessed the outlook for high-growth companies.
The latest sell-off followed US inflation data showing the fastest price growth in five months. The figures prompted traders to increase bets on further Federal Reserve rate hikes, even if the central bank left rates unchanged in October.
Higher interest rates can weigh on technology stocks because their valuations often depend on expectations of earnings growth further into the future. US Treasury bonds recovered much of their initial losses as investors sought safer assets, while the dollar weakened.
This article is for informational purposes only and should not be considered investment advice from Kotak Neo. For compliance T&C and disclaimers, Visit www.kotakneo.com/disclaimer
Vishwa has spent 10+ years across fintech and FMCG doing what most people miss, connecting the dots, catching trends before they trend, and finding the angle nobody else thought to ask about.
At Kotak Neo, she drives content strategy for neoshorts, Kotak News Desk, and Investing Guide, turning market noise into something worth reading.
When she's not decoding markets, she trades charts for canvases, chasing art, painting, and architecture across cities she's yet to explore.
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