Nifty IT turns leader again as Indian tech stocks rebound on AI deal

Indian information technology stocks are back in focus for domestic and global investors, with Nifty IT turning into a relative outperformer after weeks of volatility in the broader market. A sharp 3.2% surge in the Nifty IT index in the last trading session, led by buying in Wipro, Tech Mahindra, HCL Technologies, Infosys, and TCS, has repositioned the sector as a tactical overweight candidate for institutions looking for defensives with earnings visibility and artificial intelligence (AI) optionality. The rally comes amid a risk-off spell in the Sensex and Nifty 50, and against a backdrop of weakening tech hiring and still-muted global discretionary IT spending.

Key Highlights

• Nifty IT jumps 3.2% in the last trading session, closing near 29,832 and outperforming benchmark indices.
• Wipro rallies on a large ServiceNow AI deal and buyback support, turning into a high-conviction “buy-the-dip” idea for traders.
• HCL Tech and Tech Mahindra emerge in top short-term buy lists, with clearly defined buy zones, targets, and stop-loss levels.
• Infosys and TCS remain core sector benchmarks as investors watch for generative AI-led deal wins and margin resilience.
• Structural headwinds persist as India’s tech job openings drop to about 93,000, the lowest in over two years, underscoring productivity and automation pressures.

Nifty IT Index Leads Domestic Tech Stocks Higher

After underperforming for much of the recent risk-on phase in cyclicals and domestic themes, the Nifty IT index has reasserted itself as a relative winner, closing the previous session up roughly 3.2% at around 29,832. This move marked its strongest single-day gain in months and came even as the Sensex and Nifty 50 saw a sharp correction, with the Sensex down more than 1,000 points in the prior session. The rotation suggests that institutions are rebalancing towards export-focused IT names as a defensive hedge amid heightened volatility in domestic cyclicals and rate-sensitive sectors.

Technical analysts now describe the Nifty IT trend as bullish with strong near-term momentum. Key support is seen at about 29,300 (immediate) and 28,900 (secondary), while resistance is pegged near 30,500 and then 31,200. Short-term trading strategies in the derivatives and cash segments are being built around these levels, with buy-on-dip tactics favored so long as the index holds above the 29,300 floor. A sustained break above 30,500 could open up incremental upside and potentially trigger fresh long-side institutional flows through IT-heavy ETFs and quant strategies.

The Nifty IT surge has been driven by stock-specific catalysts. Wipro’s rally on the back of a ServiceNow AI deal and a supportive buyback price, Tech Mahindra’s sharp single-day gains of nearly 4.9%, and continued strength in HCL Tech and TCS have collectively pulled the index higher. For investors benchmarking to the Nifty 50 and sectoral indices, the recent performance has temporarily shifted the leadership baton back to large-cap IT from the domestic mid-cap and PSU baskets that had dominated flows in the prior months.

Stock-Specific Action: Wipro, HCL Tech, Tech Mahindra, Infosys, TCS

At the stock level, Wipro has emerged as one of the most closely watched names in the Indian IT universe. The stock is now underpinned by a buyback price close to Rs 250, which effectively creates a 20% premium over key support around Rs 200–205. This has prompted several trading desks to treat any decline towards the Rs 200 zone as a structural “buy-the-dip” opportunity, backed both by corporate action support and improving sentiment around its AI and ServiceNow partnership trajectory. The recent ServiceNow AI deal has been flagged as a sentiment driver, reinforcing the narrative of Wipro’s attempt to reposition itself as a serious player in AI-led transformation deals.

HCL Technologies has also entered the preferred lists of short-term and swing traders. Recent tactical recommendations cited a closing price near Rs 1,182, with a suggested buy zone in the Rs 1,170–1,190 band, near-term targets in the Rs 1,260 and Rs 1,310 region, and a stop-loss around Rs 1,140. The stock has benefited from its relatively stable large outsourcing contracts, strong presence in infrastructure services, and perceived resilience in a macro environment where global tech budgets are skewed towards cost take-out and cloud operations rather than pure discretionary digital spends.

Tech Mahindra delivered one of the strongest moves within the IT pack, closing near Rs 1,480 and rising close to 4.85% in the last session. Short-term trade setups have been built around a buy zone of Rs 1,465–1,485, with target levels at Rs 1,560 and Rs 1,610 and a stop-loss near Rs 1,430. For institutional investors, the key question remains how quickly the company can complete its turnaround in communications, consolidate its leadership change, and demonstrate a sustainable recovery in margins. The market appears to be pricing in early signs of improvement and potential upside from AI, 5G, and cloud network transformation deals.

Infosys and TCS, while less volatile in the past session relative to some peers, remain the structural bellwethers for the sector and key weights in both Nifty 50 and Nifty IT. Traders are tracking Infosys with a technical support reference around Rs 1,165, with near-term sentiment supported by its pipeline of generative AI engagements with global clients. For TCS, support near Rs 3,750 is being monitored as the critical zone to defend. Both names remain core long-term holdings for long-only funds, given their diversified client bases, superior balance sheets, and ability to absorb pricing and wage pressures better than mid- and small-cap IT peers.

Indian IT Leaders: Trading Levels and Near-Term Setups

The following snapshot captures key trading and technical reference levels currently shaping market positioning in major Indian IT stocks:

These levels are being actively used by institutional dealing desks and proprietary traders to structure short-term trades in the cash and F&O markets. For portfolio managers, they also serve as practical reference points for staggered accumulation or profit-taking, especially in a volatile broader market where the Nifty 50 and Sensex are seeing abrupt risk-on and risk-off swings. Retail participation has grown significantly as access to a reliable trading platform has become more widespread across SEBI-registered brokers.

Market Outlook

From a macro perspective, the Indian IT sector continues to operate in a challenging yet opportunity-rich environment. On the positive side, a stable rupee, resilient US economic data, and the Reserve Bank of India’s cautious but predictable policy stance provide a supportive backdrop for export earnings translation into INR. Moreover, the rapid adoption of AI, automation, and cloud modernization continues to create new deal pipelines in cost optimization, digital operations, and application modernization, where Indian IT vendors have strong delivery credentials.

However, structural headwinds are visible in the domestic labour market. Recent data indicate that active tech job openings in India have fallen to around 93,000, the lowest level in roughly 28 months, reflecting a combination of slower hiring, increased productivity expectations, and accelerated adoption of automation and AI tools in delivery.

Trading & Investment Guides

• What is Demat Account?
• What is Trading Account?
• How to Open a Demat Account With Findoc?
• What is Algo Trading?
• Best Algo Trading Platform