Sector-Wide Gains Lead the Recovery
All ten constituents of the Nifty IT index traded with positive momentum in early trading. Mphasis and Persistent Systems saw gains of 3% to 4%, while Coforge, LTIMindtree, Tech Mahindra, HCLTech, TCS, Infosys, and Wipro recorded increases of 2% to 3%.
The previous day’s sell-off had been dramatic, with eight out of the top ten Nifty 500 losers being IT companies. Analysts noted that the sharp decline had pushed many of these stocks into “oversold” territory, prompting a technical bounce.
Global Triggers Behind the Relief Rally
One of the key positive triggers was the performance of software stocks on Wall Street. Following the announcement of new AI tools by Anthropic earlier this month, global software stocks had faced pressure. However, a relief rally emerged overnight after Anthropic announced partnerships with multiple SaaS companies, including Salesforce, signaling collaboration rather than disruption.
Shares of Salesforce gained over 4% in Tuesday’s session, while other companies such as Docusign and ServiceNow rose between 1% to 2%. This development eased concerns about potential AI-driven disruption to IT services, which had weighed heavily on investor sentiment.
Domestic Outlook: Oversold Stocks Spur Recovery
Domestically, seven of the ten Nifty IT constituents had already declined 20% or more in the first two months of 2026. This steep correction set the stage for a technical rebound, as many investors viewed valuations as attractive. Wedbush Securities and other sector analysts have suggested that fears of Anthropic-led disruption are exaggerated, supporting a recovery narrative.
Overall, the Nifty IT index, which was on track for its worst monthly performance since April 2003, witnessed a stabilization, highlighting resilience among major Indian IT players. Investors are now cautiously optimistic, tracking global tech trends and domestic demand for IT services.
Key Takeaways for Investors
- Sector-wide rebound up to 4% led by Mphasis and Persistent Systems.
- Global software recovery, particularly Salesforce, alleviated disruption fears.
- Domestic IT stocks oversold, creating a technical bounce opportunity.
- Analysts maintain positive long-term outlook despite short-term volatility.
