Information Technology (IT) stocks rallied sharply on Monday, emerging as the top-performing sector on Dalal Street as investors bet on improving prospects for technology spending in the US, the biggest market for Indian software exporters.
The Nifty IT index jumped more than 3% in early trade, with heavyweights Infosys, TCS, Tech Mahindra, Wipro and HCLTech posting strong gains. Infosys surged 4.2% to Rs 1,209.60, while Tech Mahindra gained 3.3% and TCS rose 2%.
Among mid-cap IT players, Persistent Systems climbed 4.3%, LTIMindtree advanced 3.9%, Mphasis gained 3.8% and Coforge rose 3.6%.
The rally comes amid growing expectations that the US Federal Reserve could cut interest rates later this year. Lower borrowing costs typically support corporate spending and improve demand for technology services, a key revenue driver for Indian IT companies.
Investors are also seeing value in the sector after months of underperformance. While broader markets have rallied strongly, several IT stocks have lagged due to concerns over weak discretionary spending by global clients and a slowdown in technology budgets.
Market participants believe that demand conditions may be stabilising. Recent commentary from major IT companies has suggested that clients are becoming more willing to spend on digital transformation, cloud migration and artificial intelligence projects.
The sector is also benefiting from hopes that earnings growth could improve in the coming quarters if US economic conditions remain stable and recession fears continue to ease.
Despite Monday’s rally, many frontline IT stocks remain well below their 52-week highs. TCS is still significantly below its 52-week peak of Rs 3,538, while Infosys remains far from its high of Rs 1,728, indicating room for further recovery if business sentiment improves.
With expectations of easing monetary policy in the US and signs of improving technology spending, investors are returning to IT stocks, making the sector one of the strongest gainers in Monday’s session.