Indian IT stocks extended their rally on Wednesday, with shares of Infosys, TCS, HCLTech, Wipro, Coforge, and Tech Mahindra climbing as much as 5%, even as semiconductor stocks worldwide came under intense selling pressure, according to a Business Today report. The gains mark a sharp reversal after a prolonged decline for most of this year, driven by shifting investor sentiment from high-flying AI stocks to value-oriented technology shares.
Stock performance highlights
On the BSE, TCS rose 3.2% to ₹2,476, Infosys jumped 4.1% to ₹1,152, HCLTech gained 2.3% to ₹1,350, and Wipro added 2.2% to ₹185. Mid-cap IT companies outperformed their larger peers, led by Coforge, which rallied another 5% after reporting a strong first-quarter performance. Persistent Systems also advanced more than 3%.
| Company | Stock Price (₹) | Change (%) |
|---|---|---|
| TCS | 2,476 | +3.2% |
| Infosys | 1,152 | +4.1% |
| HCLTech | 1,350 | +2.3% |
| Wipro | 185 | +2.2% |
| Coforge | — | +5% |
| Persistent Systems | — | >+3% |
The gains came despite headwinds including subdued discretionary technology spending, pricing pressure, higher employee costs, and uncertainty over how artificial intelligence could affect conventional outsourcing revenues, the report noted.
AI optimism under scrutiny
“The AI trade is being viewed with a much greater degree of skepticism, and the shift in sentiment means it has become something of a one-way trade, with stocks being sold unmercifully,” Mark Luschini, chief investment strategist at Janney Montgomery Scott, told Bloomberg. The recent correction in the technology-heavy Nasdaq 100 reflects a changing mood among investors toward some of Wall Street's biggest outperformers in recent years, the source added.
As spending on artificial intelligence continues to rise sharply, markets are increasingly questioning when these investments will begin generating meaningful returns. Fresh developments in China have further unsettled investors. ChangXin Memory Technologies (CXMT) made a spectacular stock market debut, with its shares soaring nearly 500%, while reports also indicated that a Chinese state-backed company had started manufacturing immersion DUV lithography equipment.
"The market's concern lies less in CXMT's current earnings and more in its potential for accelerated capacity expansion to rival Korean companies, as well as its technology development following the IPO," Kim Seok-hwan, a Seoul-based market analyst at Mirae Asset Securities, told Reuters.
Asian markets under pressure
Asian equities remained under pressure on Wednesday, extending the previous session's steep losses as investors grew increasingly uneasy about lofty artificial intelligence valuations, rising competition, and the scale of tech spending. The cautious mood prevailed ahead of earnings from major global tech firms and the US Federal Reserve's monetary policy announcement.
South Korea's KOSPI swung sharply, falling as much as 12% after recovering from Tuesday's drop of more than 10%, which had taken the index to a three-month low. SK Hynix shares slumped 14% despite robust earnings — quarterly operating profit increased more than sixfold — but failed to match market expectations. Samsung Electronics shed another 10%, with the two companies together accounting for nearly half of the benchmark index.
MSCI's broad Asia-Pacific index excluding Japan declined 1%, adding to Tuesday's 3.6% slide, on course for an 8% monthly fall. Japan's Nikkei lost 1% and was headed for a monthly decline of more than 10%.
Outlook for Indian IT stocks
Global brokerage Jefferies said in a recent report that its discussions with more than 50 foreign portfolio investors (FPIs) indicate improving sentiment towards Indian equities as enthusiasm around the AI trade begins to fade, according to an ET report. Jefferies noted that FPI flows have turned positive, while both macroeconomic indicators and corporate earnings have exceeded expectations. With IT services stocks having borne the brunt of concerns surrounding AI disruption, the shift in global investor focus could provide a tailwind for Indian IT names in the near term.
The next major catalysts for markets will be earnings from global technology bellwethers and the Federal Reserve's policy announcement, both of which could reinforce or reverse the current rotation away from AI-heavy portfolios.
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