Domestic technology stocks have staged a strong turnaround in October after suffering heavy losses, as better-than-expected September-quarter performance, attractive valuations, and fears of a global AI slowdown have prompted investors to turn their attention back to software stocks, making the Nifty IT index a standout performer.
TCS was among the top performers in the pack, surging 22% in October, followed by Tech Mahindra and Wipro, with each surging 20%. Mphasis was next on the list with a 16% rally. Infosys gained 16%, while HCL Technologies advanced 15.5%.
The rally follows a global selloff in software stocks earlier this year, as some investors feared that AI could disrupt their business models. Slowing revenue growth amid geopolitical concerns and rising client demand for lower prices also sapped investor sentiment.
Amid strong support from heavyweight stocks, the Nifty IT index advanced 16% and reclaimed the 30,000 mark, touching its highest level in eight months last week. The gauge has now recovered 22% from its July low but remains down about 18% this year, putting it on track for its worst annual performance since 2022.
The combined market capitalisation of Nifty IT stocks increased from about ₹22.01 lakh crore to ₹25.88 lakh crore, an increase of ₹3.87 lakh crore.