MUMBAI: Information technology (IT) stocks emerged as the sole bright spot in an otherwise weak session on Thursday, with the Nifty IT index rallying 1.5 per cent to 33,167.60 even as benchmark indices declined sharply [citation:1][citation:4].
The BSE Sensex declined 584 points to 83,150.25, while the Nifty 50 fell 168.85 points to 25,650.50 by afternoon trade, weighed down by profit booking in financial and FMCG shares [citation:2]. However, IT stocks stood out, with heavyweights gaining up to 2 per cent [citation:1][citation:4].
IT stocks: Top gainers
Infosys climbed nearly 2 per cent to an intraday high of ₹1,401.50, continuing its upward momentum after announcing a partnership with AI firm Anthropic [citation:4]. Tata Consultancy Services (TCS) advanced about 2 per cent to ₹2,748.70 from its previous close of ₹2,694.90 [citation:4].
| Company | Price (₹) | Change (%) |
|---|---|---|
| Infosys | 1,401.50 | +2.0% |
| TCS | 2,748.70 | +2.0% |
| HCL Technologies | 1,895.00 | +1.8% |
| Tech Mahindra | 1,650.00 | +1.5% |
| Coforge | 5,890.00 | +2.0% |
| Wipro | 215.44 | +1.6% |
HCL Technologies and Tech Mahindra gained around 1.5-1.8 per cent, while Coforge shares were up more than 2 per cent [citation:1]. Wipro shares edged up 1.6 per cent to ₹215.44 [citation:4].
Bucking the trend, Persistent Systems shares fell more than 2 per cent, and Mphasis shares traded in the red with marginal losses [citation:1].
What drove the rally?
1. Wall Street tech rally
The sharp rally in Indian IT stocks followed a tech rally on Wall Street, where Nvidia's new multi-year deal with Meta Platforms eased some worries around AI-led disruption in the sector [citation:1].
Nvidia signed a multiyear agreement to sell millions of its current and future artificial intelligence chips to Facebook-parent Meta Platforms, sending Nvidia shares up 1.6 per cent and Meta shares 0.6 per cent higher [citation:1]. Amazon shares gained 1.8 per cent, while Microsoft rose 0.7 per cent [citation:1].
The S&P Software & Services index gained 1.26 per cent, while the broader S&P 500 rose 0.56 per cent. The tech-heavy Nasdaq gained 0.78 per cent [citation:1].
"At a certain point, weakness in tech was bound to bring in the marginal buyer. These are still high-growth names. They were expensive and they've gotten cheaper. There are still a lot of people who want to be exposed to tech for the next several years." — Ross Mayfield, investment strategy analyst at Baird [citation:1].
2. Value buying after sharp correction
Today's rise in Indian IT stocks was also driven by value buying, with analysts terming the rise as a tactical bounce after the sharp selloff. The Nifty IT index had lost 8.2 per cent last week, its worst performance in 11 months [citation:1].
The decline began earlier this month amid concerns that artificial intelligence can intensify competition after Anthropic's launch of a legal AI tool for its Claude AI chatbot [citation:1].
3. Brokerage views turn constructive
Nomura said that valuations of IT stocks are in the 'value' zone after the strong correction, noting that the earlier fall was driven by concerns around AI-led ADM disruption, SaaS irrelevance and margin compression. The brokerage, however, sees these AI-led disruption fears as oversimplifying IT services' role [citation:1].
In a note titled 'India IT Services: Looking through the AI fog', JPMorgan's Asian Pacific Equity Research team argued that artificial intelligence will create new areas of work, instead of simply shrinking opportunities for IT vendors [citation:1].
"IT firms remain the plumbers of the technology world. However, it's overly simplistic to assume that AI can automatically generate enterprise grade software and replace the value IT Services firms create across the cycle." [citation:1].
According to insights drawn from a Tata Mutual Fund report, India's IT services ecosystem is positioned to benefit from the next phase of the global AI cycle, which is shifting from hardware-led investment toward enterprise deployment and integration [citation:4].
4. India AI Impact Summit
Fresh optimism around artificial intelligence demand coincided with supportive domestic cues. Investor sentiment improved after announcements and deal chatter linked to the India AI Impact Summit 2026 highlighted growing partnerships and enterprise adoption opportunities for services firms [citation:4][citation:10].
Broader market context
Despite the IT rally, broader markets remained under pressure. The BSE Sensex fell 584 points (0.7 per cent) to 83,150.25, while the Nifty 50 declined 168.85 points (0.65 per cent) to 25,650.50 [citation:2].
Among broader markets, the Nifty Midcap 100 declined 0.52 per cent and the Nifty Smallcap 100 fell 0.11 per cent [citation:2]. Sectoral indices were mixed, with Nifty Realty falling 0.56 per cent, while Nifty Private Bank and FMCG indices declined 0.2 per cent each [citation:2].
The India VIX, a measure of market volatility, rose 7.40 per cent to 13.13, reflecting heightened uncertainty amid the broader decline [citation:2].
- Nifty IT index: 33,167.60 (+1.5%) — best performing sector [citation:1]
- Top gainers: Infosys (+2%), TCS (+2%), Coforge (+2%) [citation:1][citation:4]
- Infosys: ₹1,401.50 (intraday high) after Anthropic partnership [citation:4]
- TCS: ₹2,748.70 from previous close of ₹2,694.90 [citation:4]
- Wipro: ₹215.44 (+1.6%) [citation:4]
- Broader market: Sensex down 584 pts, Nifty below 25,700 [citation:2]
FII activity: IT still under pressure
Despite today's rally, foreign institutional investors (FIIs) have pulled out more than ₹13,000 crore from five major sectors during the first half of February, with IT stocks taking the worst hit amid lingering worries over AI-led disruption [citation:6].
According to Moneycontrol data, FIIs pulled out ₹10,956 crore from the IT sector in the February 1-15 period against net investment of ₹240 crore in the previous fortnight [citation:6]. Total FII investment in IT shares dropped to a four-year low of ₹4.49 lakh crore as of February 15, down 16 per cent compared to ₹5.34 lakh crore at the end of January [citation:6].
Among leading stocks, Infosys fell 16.5 per cent in February so far, TCS by 14 per cent and HCL Technologies by 14.2 per cent before today's rebound [citation:6].
FII outflows by sector (Feb 1-15, 2026)
| Sector | Outflows (₹ crore) |
|---|---|
| IT | 10,956 |
| FMCG | 1,182 |
| Healthcare | 1,051 |
| Consumer Durables | 434 |
| Telecom | 106 |
On the positive side, sectors like capital goods, financial services, oil and gas, metals and mining attracted FII funds of ₹31,850 crore during the fortnight [citation:8].
Institutional flows (February 18)
On February 18, FIIs were net buyers of equities worth ₹1,154.34 crore, while DIIs bought shares worth ₹440.34 crore. FIIs have now been net buyers for two consecutive sessions, though they remain net sellers of ₹196.14 crore so far in February [citation:2].
What lies ahead
Analysts expect the IT sector to see a gradual recovery rather than sharp growth in the near term. While sentiment has improved on AI partnerships and pipeline visibility, market participants remain mindful of execution challenges, including reskilling, pricing pressure and the gap between technological capability and enterprise adoption speed [citation:4].
The trajectory of global interest rates, US economic data, and further developments in AI adoption will remain key drivers for the sector.
Key takeaways
- IT stocks buck trend: Nifty IT gains 1.5% despite Sensex falling 584 points
- Top performers: Infosys, TCS, Coforge rise nearly 2% each
- Global catalyst: Nvidia-Meta multi-year AI chip deal lifts sentiment [citation:1]
- Value buying: IT index had lost 8.2% last week, worst in 11 months [citation:1]
- Brokerage view: Nomura sees valuations in 'value' zone; JPMorgan says AI fears oversimplified [citation:1]
- FII context: ₹10,956 crore pulled from IT in Feb 1-15 despite today's rally [citation:6]
Disclaimer: This report is based on provisional closing data. Market conditions are subject to change. Please consult your financial advisor before making investment decisions.