Mumbai: Indian information technology stocks witnessed a strong rally on Monday, with the Nifty IT index emerging as the best-performing sector amid a weak broader market. The surge was driven by renewed optimism around global artificial intelligence spending and strong demand forecasts from US-based cloud software company Snowflake.
The Nifty IT index jumped as much as 3.5 per cent during intraday trade before closing 2.66 per cent higher. The gains came even as benchmark indices and most sectoral gauges ended the day under pressure.
Infosys, Tech Mahindra and Persistent lead gains
The rally was broad-based across both large-cap and mid-cap technology stocks.
Shares of Infosys rose 3.6 per cent to close at ₹1,202.50, while Tech Mahindra climbed 4 per cent to emerge as one of the top gainers on the Nifty 50 index. Tata Consultancy Services gained 1.7 per cent, while HCL Technologies and Wipro also registered gains.
Among mid-cap counters, Persistent Systems surged more than 3 per cent, while Coforge and KPIT Technologies advanced over 2 per cent.
Global AI demand boosts investor confidence
Market participants attributed the rally to improving global sentiment towards technology companies after Snowflake reported strong earnings and issued an optimistic outlook linked to artificial intelligence demand.
The positive signals reinforced expectations that enterprise spending on AI, cloud computing and digital transformation remains strong despite ongoing global economic uncertainty. Analysts believe the development could support deal flow and revenue growth for Indian IT firms, many of which derive a significant portion of their earnings from overseas markets.
Investor confidence was also supported by the continued global technology rally, particularly in the United States, where growing investment in AI infrastructure and software services has boosted technology stocks.
US market exposure remains a key driver
The United States continues to be the largest revenue contributor for India’s IT services industry, accounting for nearly 70 per cent of software and technology exports. As a result, any improvement in American business sentiment or enterprise technology spending tends to directly benefit Indian IT companies.
Analysts noted that expectations of stronger corporate spending on AI solutions, cloud platforms and automation technologies are helping revive confidence in the sector after months of concerns about AI-driven disruption.
Recent partnerships and AI-focused initiatives by major Indian IT companies have also strengthened investor sentiment. Industry observers highlighted collaborations involving AI solutions, enterprise automation and cloud services as indicators that Indian firms are adapting to the changing technology landscape.
IT sector outperforms broader market
The rally stood out because it occurred during a largely subdued trading session for the broader market.
While several sectors faced selling pressure, technology stocks attracted strong buying interest, helping the Nifty IT index significantly outperform benchmark indices.
Market experts believe that although concerns regarding AI-related disruption remain, investors are increasingly viewing Indian IT companies as beneficiaries of the global AI investment cycle rather than victims of it.
Outlook remains positive
Analysts expect investor focus to remain on global technology spending trends, US economic indicators and corporate AI investments in the coming months.
If enterprise demand for AI and digital transformation services continues to strengthen, Indian IT firms could witness improved revenue visibility and stronger deal pipelines.
While volatility may persist, Monday’s rally signals growing optimism that the sector is well-positioned to benefit from the next phase of global technology growth driven by artificial intelligence.