Indian IT stocks are experiencing a robust surge, with the Nifty IT index jumping by approximately 2% today. This rally is spearheaded by major players like Infosys, TCS (Tata Consultancy Services), and Tech Mahindra.

Key Gainers and Market Performance

Tech Mahindra is leading the pack, with its shares up by 3.55%. Other notable gainers include Mphasis (up 2.75%), LTIMindtree, and TCS, all trading with gains exceeding 2%. Since the beginning of the month, the Nifty IT index has outperformed the broader market, surging 3.04% compared to a 0.6% gain in the Nifty50 index.

Driving Factors Behind the Surge

Several factors are contributing to this positive momentum in the IT sector:

• US Developments: Optimism has risen due to progress on a funding bill in the U.S. Senate aimed at reopening the government after a prolonged shutdown. Furthermore, U.S. President Donald Trump's recent remarks acknowledging the need for skilled workers from abroad have boosted market sentiment. This is particularly significant as Indian IT companies heavily rely on the H-1B visa program to deploy skilled engineers to the United States, their largest market.
• India-US Trade Deal Hopes: Renewed optimism surrounding a potential trade agreement between India and the United States is further fueling the rally.
• Q2FY26 Earnings: Analysts have noted that the rally is supported by better-than-expected second-quarter earnings from IT companies. Infosys, in particular, reported a profit and revenue beat, and also increased its revenue guidance.
• Technical Factors: Improving valuations and expectations of potential US Federal Reserve rate cuts have also contributed to the upswing.

Individual Stock Highlights

• Infosys: Infosys' shares have seen a significant increase, with the company reporting strong Q2FY26 results and raising its revenue guidance. The board will also meet to consider a share buyback proposal. As of today, Infosys is trading at ₹1,552.10, experiencing a 1.11% increase in the past 24 hours.
• TCS: TCS shares are also on the rise, with the company beating second-quarter revenue expectations. The stock is currently trading up 2.38%.
• Tech Mahindra: Tech Mahindra is leading the gains among its peers, with its stock price moving up by 3.56%.

Analysts' Views and Market Outlook

Analysts are closely watching these developments, with many reiterating bullish calls post the better-than-expected Q2 earnings. The potential for a US Federal Reserve rate cut is also seen as a positive trigger for IT stocks, as it could boost discretionary spending by US clients, improving demand for IT services.

Nifty IT Index: Key Levels and Performance

The Nifty IT index is a key indicator of the Indian IT sector's performance. The index has given the following returns in the recent past:

• Past 1 week: 0.30%
• Past 1 month: 0.82%
• Past 3 months: 4.55%
• Past 1 year: -15.20%

The Nifty IT index closed at 36,116.9 on the previous day, and the current value stands at 36716.75. The 52-week high for the index is 46,088.90.

Broader Market Impact

The surge in IT stocks has had a positive impact on the broader Indian stock market, with the benchmark Sensex climbing and the Nifty 50 breaching the 26,000 mark.

Caution and Key Considerations

While the current sentiment is largely positive, investors should remain cautious and monitor global cues, particularly developments related to the US economy and trade policies. The IT sector has faced headwinds, with major players experiencing declines from their peak values. Foreign institutional investors (FIIs) have also reduced their stakes in some of the top IT stocks.