IT Stocks Rise for Third Straight Day; TCS, Tech Mahindra Gain Up to 3% on US Deal Hopes

IT Shares Extend Rally for Third Session; Tech Mahindra, TCS Lead Gains on India-US Trade Deal Optimism

Indian IT stocks continued their upward momentum for the third consecutive session on Wednesday, buoyed by growing optimism around a potential India-US trade agreement and expectations of an end to the prolonged US government shutdown. The buying interest in IT counters was further supported by a positive outlook on global tech demand and hopes of monetary easing by the US Federal Reserve.

The Nifty IT index surged over 2% intraday, marking a 5% gain over the last three sessions, as investors turned bullish on export-driven technology companies. All 10 constituents of the index traded in the green, reflecting broad-based optimism across the sector.

Tech Mahindra, LTIMindtree, and Mphasis Among Top Gainers

Leading the rally, Tech Mahindra shares jumped 3.7% to touch an intraday high of ₹1,460.20 on the NSE, supported by strong buying momentum and improving sentiment in global markets.

LTIMindtree and Mphasis followed closely, rising 2.95% and 2.68%, respectively, while Tata Consultancy Services (TCS), HCL Technologies, Infosys, and Persistent Systems advanced between 1–3%.

Market experts attributed the rally to renewed investor confidence in the sector’s earnings visibility amid easing macroeconomic risks.

“Optimism over a potential India-US trade agreement has boosted market sentiment, which is further supported by expectations of an end to the US government shutdown and a possible rate cut in December,” said Gaurav Garg, Research Analyst at Lemonn Markets Desk.

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Nifty IT Index Outperforms Broader Market

The Nifty IT index outperformed the benchmark Nifty 50, which traded with modest gains. The sustained strength in IT counters reflects investor preference for defensive, export-oriented sectors amid geopolitical and domestic uncertainties.

With all major constituents in the green, the IT index has now gained nearly 5% in three trading days, signaling a short-term turnaround from the consolidation seen in previous weeks.

“The IT pack has been under pressure for most of the year due to demand slowdown and margin pressures. However, the recent global developments and a potential pick-up in outsourcing deals are improving sentiment,” said a senior analyst at Kotak Institutional Equities.

India-US Trade Deal Hopes Lift Sentiment

Investor optimism was lifted after US President Donald Trump indicated that Washington and New Delhi were close to finalizing a new trade deal aimed at strengthening economic and security ties between the two nations.

“We’re getting a fair deal, just a fair trade deal,” Trump said during the swearing-in of Sergio Gor, the new US envoy to India, at the Oval Office. “We’re making a deal with India — a much different deal than we had in the past. We’re getting close.”

The trade deal is expected to boost energy exports, enhance investments, and open new opportunities for India’s technology and manufacturing sectors, which together account for a significant portion of bilateral trade.

Since IT services exports form a large part of India’s trade relationship with the US, analysts believe a favorable trade pact could reduce operational bottlenecks and support revenue growth for Indian tech companies.

End to US Government Shutdown Fuels Market Optimism

Adding to the positive mood, expectations of an imminent end to the 42-day US government shutdown further improved risk sentiment across global markets. The House of Representatives was expected to vote on a compromise bill late Wednesday to restore funding to government agencies.

The US Senate had already passed the measure earlier in the week, and House Speaker Mike Johnson expressed confidence that it would pass. President Donald Trump is likely to sign the bill into law, effectively reopening federal agencies and restoring normalcy to the world’s largest economy.

“We’re opening up our country. It should have never been closed,” Trump said during a Veterans Day event in Arlington, Virginia.

For Indian IT companies, which derive a large share of their revenues from US clients, the resolution of the shutdown and improved business activity in the US are expected to translate into stronger deal pipelines and faster project executions in the coming quarters.

Why IT Stocks Are Reacting Positively

The ongoing rally in IT shares is driven by three primary factors:

• Trade optimism: The proposed India-US trade deal is expected to enhance business visibility and streamline regulations for cross-border technology services.

• Shutdown resolution: The end of the US government shutdown reduces uncertainty for IT clients, particularly in federal and financial sectors.

• Macro tailwinds: The likelihood of a US Fed rate cut in December could lead to softer dollar strength, improving profitability for Indian exporters.

“With around 60-70% of IT companies’ revenues coming from North America, any improvement in US economic stability has a direct positive impact on earnings outlook,” said Rakesh Arora, Founder at Go India Advisors.

Outlook: IT Sector May See Near-Term Upside Amid Global Stability

Market experts expect the Nifty IT index to maintain its positive bias in the near term, supported by stable demand, improving macros, and continued FII interest in high-quality export names like TCS, Infosys, and HCL Technologies.

However, they caution that while short-term tailwinds may drive momentum, long-term growth will depend on deal wins, margins, and client spending recovery in key verticals such as banking, healthcare, and retail.

“We expect IT stocks to remain in focus as global economic conditions improve. Investors should continue to accumulate quality names on dips, given the sector’s resilience and steady cash flows,” analysts added.

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