Nifty IT index soars 6% intra-day, TechM hits record high; here's why

Nifty IT index movement today

Shares of information technology (IT) companies were in demand with the Nifty IT index soaring 6 per cent to 40,301.4 on the National Stock Exchange (NSE) in Tuesday’s intra-day trade after the announcement of a key India–US trade deal.

 

Among the individual stocks, Tech Mahindra hit a record high of ₹1,854, rallied 8 per cent in an intra-day deal. The stock price of HCL Technologies touched a 52-week high of ₹1,780.10, as it surged 6 per cent in intra-day.

 

Mphasis, Persistent Systems, Wipro, Infosys, and Tata Consultancy Services (TCS) were up in the range of 6 per cent to 8 per cent.

 

 

At 11:14 AM; Nifty IT index was up 2.2 per cent, as compared to 2.75 per cent rise in the Nifty 50.

 

In the past six months, IT index has outperformed the market by soaring 12 per cent, as against 4.3 per cent gain in the benchmark index.

What’s driving IT stocks on Tuesday?

The India–US trade deal, under which Donald Trump reduced reciprocal tariffs on Indian goods to 18 per cent, has lifted sentiment toward India’s export ecosystem, including the IT services space. While IT services and software exports are not directly tariff-linked, improved trade relations with the US, which contributes over 60 per cent of revenues for the sector signals stronger strategic alignment and easing geopolitical overhang, according to ICICI Securities.

 

The brokerage firm believes the impact of the India-US trade deal is sentimentally positive, while key catalysts for IT services would remain factors such as visa norms, tech budgets, and data regulations. The announcement improves geopolitical sentiments that will help US clients rethink tech budgets in favour of Indian tech services companies and strengthens India’s positioning as a strategic technology partner, supporting longer-term growth in artificial intelligence (AI), engineering research and developement (R&D), and platform-led work. 

 

Improved policy optics could encourage US enterprises to advance discretionary tech spending and GCC expansion, even though immediate revenue or margin acceleration for IT firms is unlikely, the brokerage firm said.

 

Meanwhile, the Budget 2026 contains a few provisions relevant to the IT services industry, which are:

 

• A change in the taxation policy treating buyback proceeds as capital gains is a marginal positive for shareholders and may support buyback activity.
• A downward revision of safe harbor margins and broader thresholds simplifies compliance, but is largely an administrative update.
• A tax holiday for foreign companies using data center services provided by Indian entities for providing cloud services globally makes the Indian data center ecosystem marginally more lucrative for foreign firms.

 

According to Kotak Institutional Equities, Indian data center demand will be driven by rising AI-inferencing workloads, data localization and storage requirements under the DPDP Act, state-level incentives, and increasing cloud adoption by Indian enterprises. 

 

The budget proposals provide a tax holiday until FY2047 for global cloud services companies to cater to global demand from Indian data centers, provided the foreign company routes services to Indian users through an Indian reseller entity. 

 

The data centers would have to be owned and operated by an Indian company and set up under an approved scheme of the Ministry of Electronics and Information Technology (MEITY). Furthermore, relaxed safe harbor provisions would simplify administrative processes and limit tax disputes. These new provisions would further aid the overall growth of the Indian Data Centre market, the brokerage firm said.  

 

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