Indian IT stocks rebounded on Wednesday, with the Nifty IT index rising over 2% after a recent sell-off. The recovery was driven by a global technology rally and easing concerns about artificial intelligence disrupting the sector.
After a bruising sell-off earlier this week, Indian IT stocks found their footing again on Wednesday (February 25) morning, offering investors a breather. The rebound came on the back of a global technology rally and reassuring signals that artificial intelligence may complement, rather than completely disrupt, the sector.
A Much-Needed Recovery After Tuesday’s Slide
The IT pack had taken a sharp hit in the previous session as fears grew that rapid AI adoption could upend traditional outsourcing models. But early Wednesday trade told a different story. Buying returned to frontline IT names, helping the sector emerge as one of the day’s strongest performers on the National Stock Exchange of India.
Market participants said the correction had made valuations more attractive, prompting investors to step back in.
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Global Tech Rally Sets the Tone
Positive cues from overseas markets played a major role in lifting sentiment. Technology stocks in the United States advanced overnight, with the Nasdaq 100 posting notable gains.
The rally reassured investors that the recent global tech sell-off may have been overdone, allowing risk appetite to return across Asian markets as well.
AI Fears Ease After Industry Signals
Another factor calming nerves was commentary from AI company Anthropic, which highlighted plans to build partnerships around its Claude platform. The emphasis on collaboration, rather than outright disruption, helped ease concerns that AI tools would rapidly replace existing IT service models.
For Indian IT firms, this reinforced the view that AI could become an additional revenue stream instead of a threat.
Heavyweights Lead the Rebound
The recovery was led by large-cap names:
- Tech Mahindra saw strong buying interest, rising around 3%.
- HCLTech also gained close to 3%, reflecting renewed confidence.
- Bellwethers Tata Consultancy Services and Infosys advanced over 2% each.
- Wipro edged higher, while midcap LTIMindtree outperformed with sharper gains.
The broad-based nature of the rally suggested that investors were returning to the sector as a whole, not just picking defensive names.
Volatility Cools, Confidence Returns
Market volatility indicators softened, signalling that traders expect fewer near-term shocks. Analysts believe the worst of the AI-driven panic selling may be behind us, though questions around long-term business transformation remain.
