Nifty IT was among the top gainers in the sectoral indices, rising 1.77 percent in Monday's trade led by HCL Tech, Persistent Systems, Tech Mahindra and other stocks.
The index tracks the performance of India's top IT companies and the sector as a whole.
At close, Nifty IT was at 41,662, up 1.39 percent. The pack was led by HCL Tech which was up 4.24 percent, closely followed by Tech Mahindra, which rose 2.51 percent, Persistent Systems (2.22 percent), LTIMindtree (1.76 percent) and Wipro (1.58 percent).
Tata Consultancy Services (TCS) settled at Rs 4,506.6 per share on the NSE, up 0.96 percent, while Infosys closed higher at Rs 1,878 apiece.
IT stocks rose following US Federal Reserve Chairman Jerome Powell's speech, which suggested that the US central bank was about to embark on interest rate reductions.
Investors are also keenly watching Nvidia for its earnings on Wednesday, hoping it can live up to the extremely high expectations set by the market owing to its AI rally.
Jefferies, however, sees little room for a positive surprise in Nifty IT companies, as the current estimates already account for most of the positive factors.
The brokerage firm favours Tata Consultancy Services and Infosys among IT stocks, citing limited earnings risk and attractive valuations. "The recent rise in IT stocks could be driven more by technical factors," the report stated.
Jefferies also noted that the Nifty IT index has outperformed the Nifty in 2023 and so far in 2024, even though EPS estimates for most companies have been reduced.
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