The shares of IT companies surged on September 9, pushing the sectoral index sharply into the green. The Nifty IT index rose nearly 3 percent, snapping a five-day losing streak.
The IT index ended the session at 35,255.90. It was the top sectoral gainer on the market today.
Infosys shares led the gains, jumping nearly 5 percent to trade at Rs 1,502.40 apiece. Wipro shares followed, surging nearly 3 percent. Tech Mahindra, Persistent Systems and Mphasis shares gained more than 2 percent each, while Coforge, LTI Mindtree and HCL Technologies shares rose nearly 2 percent. Tata Consultancy Services (TCS) shares were up more than 1 percent.
Here are the possible triggers for the sharp rise:
US Fed rate cut expectations:
The US Federal Reserve is set to hold its FOMC meeting from September 16 to September 17. Analysts increasingly expect the American central bank to cut its rates this time, amid weakening jobs data and rising pressure from President Donald Trump's administration.
Analysts now expect a 50-basis point rate cut at the September FOMC meeting. "August labor market data has paved the way for a 'catch-up' 50 basis point rate cut at the September FOMC meeting, similar to what occurred at this time last year," said Standard Chartered in its latest note, doubling its earlier projection of a 25-bp reduction, following a soft August jobs report.
A rate cut in the US will likely increase the discretionary spending capacity, which will likely help the IT companies which derive a major portion of their revenue from the American market.
Infosys board to consider share buyback proposal:
The shares of Infosys jumped more than 4 percent after the company announced that its board will meet on September 11 to consider a proposal for buyback of fully paid-up equity shares. If approved, this will be the first buyback of shares announced by India's second-largest IT firm since 2022, when the company had agreed to a buyback proposal of Rs 9,300 crore with a minimum buyback price of Rs 1,850 per share.
Infosys made the announcement in the post market hours of September 8. The stock jumped more than 4 percent to trade at Rs 1,494 apiece on September 9, snapping a five-session losing streak. It is currently the top gainer on the Nifty IT index, as well as benchmark indices Sensex and Nifty.
The sharp rise in heavyweight Infosys was the top contributor to the rise in the Nifty IT index.
Value buying:
The IT stocks have seen significant correction in recent days, amid tariff uncertainties and global worries. The Nifty IT index dropped nearly 4 percent in just five consecutive sessions. The sharp rise in the sector today may come as investors resort to value buying after significant correction.
"The IT stocks' rise today, especially with Infosys' buyback offer, highlights the speed at which sentiment can shift to positive when there are global and local triggers. The dual tailwinds from GST rationalization and anticipation of a U.S. Fed rate reduction are acting as a long-needed support to Indian equities, insulating them from global tariff and demand uncertainties," said Siddharth Maurya, Founder & Managing Director, Vibhavangal Anukulakara Pvt. Ltd.
"Though the IT industry has taken a hit this year, these decisions are evidence of resilience and the industry's core position in India's growth narrative. To investors, it is a reminder that long-term value resides in remaining aligned to structural pillars, even in times of short-term churn," the analyst added.
Bhavik Joshi, Business Head, INVasset PMS, however advised caution. "Foreign investors remain cautious, discouraging a sustained rally. While local policy cues and GST relief offer seasonal optimism, the lack of a sharp earnings turnaround or acceleration in contract wins keeps sentiment muted. The buyback announcement from Infosys may provide a short-lived jolt, yet the broader narrative remains one of structural caution rather than exuberance," he said.
"In essence, what separates IT from other sectors today is the 'global tether'. The expectation of a U.S. rate cut may lift overall market sentiment, but until global tech spend and deal pipelines visibly recover, IT will lag broader indices. For now, this underperformance reflects prudence—not weakness—and positions IT for a selective comeback once global visibility returns," he added.
Renewed optimism around capital allocation, coupled with easing rate-cut expectations globally, fueled broad-based gains across the sector, said Ajit Mishra – SVP, Research, Religare Broking. "However, participants shouldn't get carried away with a single day move and should wait for some signs of stability citing the prolonged underperformance," he added.
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