Relief Rally In IT Stocks After Six Sessions Of Losses; Wipro, HCL Tech Among Top Gainers

IT Stocks Find Their Footing After Prolonged Sell-Off as Value Buying Returns

Indian IT stocks staged a modest but broad-based recovery on Thursday, snapping a six-day losing streak as investors stepped in to buy beaten-down names amid improving sentiment. The rebound came after sustained profit booking had dragged the Nifty IT index down by over 4 percent in the previous six sessions, prompting bargain hunting across large-cap and mid-cap technology counters.

The Nifty IT index rose close to 1 percent during the session, with gains seen across most constituents. Market participants attributed the recovery to a mix of value buying, expectations of supportive global monetary policy, and optimism ahead of the December-quarter earnings season.

Wipro, HCL Tech Lead Gains as Buying Broadens Across IT Pack

Wipro emerged as the top gainer among IT stocks, climbing nearly 2 percent, while HCL Technologies and Mphasis advanced around 1.3 percent each. Other heavyweights such as Infosys, Tech Mahindra, Tata Consultancy Services (TCS), and LTIMindtree also traded higher, rising up to 1 percent.

Notably, nine of the ten constituents of the Nifty IT index were trading in the green, indicating broad participation in the rebound rather than stock-specific buying.

Market participants said the recovery reflected a temporary pause in selling pressure rather than a decisive trend reversal, but added that selective accumulation is beginning to emerge after the recent correction.

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Value Buying Emerges After Sharp Six-Session Correction

One of the primary drivers behind the uptick in IT stocks was value buying following a sustained decline. Over the previous six sessions, the Nifty IT index had fallen about 4.13 percent as investors booked profits amid concerns over global growth and near-term demand visibility.

With several frontline IT stocks correcting meaningfully from recent highs, investors found valuations attractive at lower levels.

Key drivers behind value buying included:

• Correction-led improvement in risk-reward

• Selective accumulation in large-cap IT names

• Stabilisation in global cues after year-end volatility

Traders noted that value buying was more pronounced in stocks with relatively stable order books and strong balance sheets.

US Rate-Cut Expectations Provide Sentiment Support

Global cues also played a supportive role in the IT sector’s rebound. Investors are increasingly hopeful that the US Federal Reserve could continue easing monetary policy in 2026, which would be positive for technology spending and discretionary IT budgets.

The US Federal Reserve is scheduled to meet on January 27–28, and while no immediate decision is expected, commentary around growth and inflation will be closely tracked. Ahead of the New Year holiday, US President Donald Trump said he would announce his choice for the next Federal Reserve chair by January, adding another layer of anticipation around future policy direction.

Lower interest rates in the US are generally seen as supportive for Indian IT companies, as they can improve demand sentiment among global clients and stabilise currency movements.

Optimism Builds Ahead of December-Quarter Earnings Season

Another key factor underpinning the recovery was optimism ahead of the December-quarter (Q3) earnings season. Market participants are expecting an improvement in demand conditions and relatively stable performance compared with earlier quarters.

Several IT majors have already announced their board meeting dates to consider quarterly results:

• Tata Consultancy Services will hold its board meeting on January 12, 2026, to approve audited standalone financial results for the quarter and nine months ended December 31.

• HCL Technologies has also scheduled its board meeting on January 12, 2026, to review financial results for the same period.

The start of earnings season often brings selective buying as investors position themselves ahead of results, particularly in sectors where expectations have already been tempered.

Sector Recovery Seen as Technical, Not Yet Trend-Changing

Despite the day’s gains, analysts cautioned that the rebound in IT stocks should be viewed in the context of recent weakness. The sector has faced multiple headwinds, including uneven global tech spending, margin pressures, and currency volatility.

Market experts said the current move appears more like a technical pullback driven by short-covering and bargain hunting rather than a strong directional shift.

An analyst tracking the sector noted,

“After a sharp and steady decline, some relief was expected. The recovery reflects value buying and positioning ahead of earnings, but a sustained uptrend will depend on management commentary and demand outlook.”

Outlook Remains Selective Heading Into 2026

Looking ahead, investors are expected to remain selective within the IT space. Companies with strong deal pipelines, exposure to cost-optimisation projects, and resilient client bases may continue to attract interest, while others could see range-bound movement.

Key factors to watch for the sector include:

• Commentary on discretionary tech spending

• Deal wins and pipeline visibility

• Currency movement and margin guidance

• Signals from US monetary policy

While Thursday’s rebound brought temporary relief, market participants agree that the sustainability of the move will hinge on earnings outcomes and global macro cues.

For now, IT stocks have found near-term support after a bruising sell-off, offering investors a breather as the sector heads into a critical earnings-driven phase.