IT stocks propel Sensex over 650 pts, Nifty rebounds 1%; TCS, Infosys, TechM, HCLTech rally up to 5%

Ending a two-session losing streak, Indian equity benchmark indices rebounded sharply on Friday, led by information technology (IT) stocks after heavyweight Tata Consultancy Services (TCS) reported September-quarter net profit and revenue above analyst estimates. Gains in IT heavyweights helped the Sensex rise more than 650 points and the Nifty 50 approach the 22,450 mark in early trade, offering some respite amid persistent concerns over elevated crude oil prices, high US bond yields and sustained foreign investor selling.

The Sensex climbed 665.18 points, or 0.93%, to 72,258.42, while the Nifty 50 advanced 212.55 points, or 0.96%, to 22,444.90. The Nifty IT index rose 3.09% to 28,593.85, making it the best-performing sectoral index among the major indices.

On the BSE Sensex pack, 27 of the 30 stocks traded in the green, with ICICI Bank, Reliance Industries and BEL being the exceptions.

TCS topped the Sensex gainers’ chart, surging over 5% to ₹2,180, while Infosys gained 3.12% to ₹1,025.15. HCL Technologies advanced 1.90% to ₹1,203.15, and Tech Mahindra rose 1.89% to ₹1,524. The positive momentum extended to other mid-sized IT stocks, with Coforge, L&T Technology Services, Mphasis and Persistent Systems among the other gainers.

TCS earnings lift IT stocks

Investor sentiment towards IT stocks improved after TCS reported September-quarter earnings that exceeded analyst estimates for both net profit and revenue. The results provided a near-term trigger for the sector, which has faced concerns over global technology spending, demand visibility and the potential impact of artificial intelligence on traditional IT services.

The earnings-led rally also came despite concerns over the US Department of Labor’s suspension of Permanent Labor Certification (PERM) applications involving major technology companies, including TCS, Infosys, Wipro and HCL Technologies.

The suspension has raised questions about the potential implications for Indian IT companies’ ability to hire and deploy foreign workers in the US. However, brokerages expect the direct operational and financial impact on Indian IT companies to remain limited, helping investors focus on quarterly performance and business fundamentals.

Crude oil, bond yields remain key risks

Despite Friday’s gains, broader market sentiment remains vulnerable to global macroeconomic headwinds. Elevated crude oil prices and high US bond yields continue to weigh on Indian equities, while sustained selling by foreign institutional investors (FIIs) has added to the pressure on benchmark indices.

V K Vijayakumar, Chief Investment Strategist at Geojit Investments Limited, said the combination of high crude prices and elevated US bond yields had pushed the near-term market structure into a strong “sell on rally” phase.

He said sustained FII selling had emboldened bearish investors to take short positions even in fundamentally strong blue-chip stocks, further weakening the market.

FIIs have sold equities worth ₹36,210 crore through exchanges so far in October, Vijayakumar said. He expects foreign investor selling to continue in the near term as long as crude prices and US bond yields remain elevated, even though valuations, particularly among large-cap stocks, have become more attractive.

While near-term volatility may persist, Vijayakumar believes the ongoing correction could create opportunities for patient, long-term investors to accumulate high-quality stocks at more attractive valuations.

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