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Why are IT stocks rising today? IT stocks were in strong demand on Thursday, May 29, with the Nifty IT index climbing as much as 1.74 per cent to hit an intraday high of 38,121.40.
Around 9:50 am, all 10 constituents of the Nifty IT index were trading in the psoitive territory. Leading the gains, LTI Mindtree surged 3.48 per cent to an intraday high of ₹5,276.80, followed by Persistent Systems, which rose 2.52 per cent to ₹5,725. Infosys gained 2.36 per cent to ₹1,608.90, while Coforge advanced 1.98 per cent to ₹8,635.
Mphasis was up 2.16 per cent at ₹2,586.20, Tech Mahindra gained 1.55 per cent to ₹1,604.90, and Oracle Financial Services rose 1.70 per cent to ₹8,661. Wipro added 1.74 per cent to ₹251.74, HCLTech rose 1.09 per cent to ₹1,675.50, and TCS saw a modest rise of 0.99 per cent to ₹3,532.50.
Why did IT shares rally in trade today?
IT stocks jumped in trade after a US federal court on Wednesday (local time) blocked President Donald Trump from imposing broad tariffs on imports under an emergency-powers law.
The decision was handed down by a three-judge panel from the US Court of International Trade in New York. According to the Associated Press, the ruling follows multiple lawsuits claiming that Trump exceeded his legal authority in attempting to implement the tariffs. READ MORE
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Another factor contributing to this positive rally in IT stocks, analysts said, was Nvidia’s Q1 results.
Nvidia announced first-quarter revenue of $44.1 billion for the period ended April 27, 2025, marking a 12 per cent increase from the previous quarter and a 69 per cent jump year-on-year (Y-o-Y).
On April 9, 2025, the company was notified by the US government that exports of its H20 products to China would now require a licence. In response to this change, NVIDIA recorded a $4.5 billion charge in the first quarter of fiscal 2026 related to excess inventory and purchase obligations, as demand for H20 products declined.
Prior to the new export restrictions, H20 sales for the quarter totaled $4.6 billion. However, the company was unable to ship an additional $2.5 billion in H20-related revenue during the period.
GAAP and non-GAAP gross margins for the quarter were 60.5 per cent and 61.0 per cent, respectively. Excluding the impact of the $4.5 billion charge, Nvidia’s non-GAAP gross margin would have been 71.3 per cent.
Earnings per diluted share came in at $0.76 on a GAAP basis and $0.81 on a non-GAAP basis. Adjusted for the charge and related tax effects, non-GAAP earnings per share would have been $0.96.
The company also declared a quarterly cash dividend of $0.01 per share, payable on July 3, 2025, to shareholders of record as of June 11, 2025.
What do experts think of the rally in IT stocks?
G Chokkalingam, founder and head of research at Equinomics Research, attributed the market rally in IT stocks to two key factors, which include the US court's decision blocking President Donald Trump from imposing broad tariffs under an emergency-powers law, and strong quarterly results from Nvidia.
He added that several IT stocks, including Infosys, HCLTech, and Wipro, have been majorly beaten down in recent market corrections, presenting a tactical buying opportunity for the short-term investors. Renewed investor interest in these IT stocks likely contributed to the ongoing rally.
Market veteran Deepak Jasani, too, believes that the primary driver behind the rally in IT stocks is the US federal court's decision to block President Donald Trump's tariffs.
“The court's move eases concerns over potential trade barriers, especially for Indian IT companies that rely heavily on US markets for revenue. With the threat of broad tariffs removed, the outlook for cross-border technology services and outsourcing remains stable, boosting investor confidence in the sector,” Jasani added.
At 10:00 AM, Nifty IT index was trading 0.84 per cent higher at 37,782.15 levels, outperforming benchmarks Nifty50, which was up 0.27 per cent at 24,820.25 levels.
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