Nifty IT index soars 6%, sees sharpest intra-day rally since April 2020

Infosys, Coforge, Persistent Systems, LTIMindtree and Oracle Financial Services Software from the Nifty IT index have rallied between 7 per cent and 8 per cent.

Nifty IT index movement today

 

Shares of information technology (IT) companies were in focus, with theNifty IT index surging 6.5 per cent on the National Stock Exchange (NSE) in Monday’s intra-day trade, thus recording its sharpest intra-day rally in over 5 years. A sharp up move in IT stocks was triggered after the US said it would reduce tariffs on China to 30 per cent from 145 per cent for 90 days. Earlier, on April 7, 2020, the Nifty IT index soared 8.3 per cent in intra-day trade.

 

At 02:12 PM; the Nifty IT index was the top gainer among sectoral indices, up 6.4 per cent, as compared to 3.5 per cent rise in the Nifty 50.

 

 

Infosys, Coforge, Persistent Systems, LTIMindtree and Oracle Financial Services Software from the Nifty IT index rallied between 7 per cent and 8 per cent. Wipro, HCL Technologies, Tata Consultancy Services (TCS), Tech Mahindra and Mphasis from the index gained in the range of 5 per cent to 6 per cent.

 

Reasons for sharp rally in IT stocks

 

The ceasefire between India and Pakistan has paved the way for a sharp rally in the market. The prime mover of the rally will be the foreign institutional investors (FII) buying which has been sustained for sixteen continuous days except last Friday when the conflict escalated. 

 

Domestic macros like expectations of high GDP growth and revival of earnings growth in FY26 and declining inflation and interest rates augur well for the resumption of a rally in the market, said Dr. VK Vijayakumar, Chief Investment Strategist, Geojit Investments.

 

Meanwhile, amid ongoing discussions regarding a trade agreement, the United States and China jointly declared a 90-day pause on a portion of their existing tariffs, as outlined in a statement released by both countries.

 

In a media address, US Treasury Secretary Scott Bessent said the two countries had agreed not only to a temporary suspension but also to a notable reduction in current tariff levels. According to Bessent, the tariff cuts will be reciprocal, with each side reducing rates by 115 per cent. 

 

During this 90-day window, the US will lower its tariffs on Chinese goods from 145 percent to 30 per cent. In a similar move, China will bring down tariffs on American imports from 125 per cent to 10 per cent. CLICK HERE FOR FULL REPORT

 

A deal would be good for the global economy, according to analysts.

 

Past performance of Nifty IT index

 

In the past one month, Nifty IT index outperformed the market by surging 15 per cent, as compared to 6.7 per cent rise in the Nifty 50. However, thus far in the current calendar year 2025, IT index has slipped 12 per cent, due to concerns over the recession in the US and the tariff war. The benchmark index has rallied 5 per cent during the same period.

 

IT sector’s Q4 results review

 

The uncertain macroeconomic environment continues to weigh on IT services demand in Q4FY25, with discretionary spending recovery remaining gradual and no material change in client behavior. Margin performance was relatively stable in Q4FY25. Looking ahead, Motilal Oswal Financial Services expect margin expansion to be driven by revenue growth, SG&A efficiencies in select companies, and pyramid optimization will be key drivers for margin expansion, and currency movements may act as a headwind for Indian IT services companies.