Indian IT Stocks Surge As Global Chip Sell-Off Rattles Asian Markets

Indian software service companies experienced a strong upward rally on July 28, 2026, defying a massive tech rout across wider Asian markets. The benchmark Nifty IT index jumped by approximately 3%, extending its gains to a second consecutive day. Major domestic IT firms, including Tata Consultancy Services (TCS), Infosys, and HCLTech, recorded substantial gains, with mid-cap players like Coforge and Mphasis leading the charge. This positive domestic sentiment was triggered by US software stocks outperforming the semiconductor-heavy Philadelphia SE Semiconductor Index (SOX) overnight.

The performance of Indian IT software firms stood in sharp contrast to a severe sell-off in Asian hardware and semiconductor stocks. South Korea's benchmark Kospi index crashed by over 9% to 10%, driven by heavy selling of major chipmaking corporations. This global chip rout extended from Wall Street to Asian financial hubs, fueled by growing investor anxiety over massive artificial intelligence infrastructure capital expenditures. Market participants are increasingly worried that astronomical AI hardware spending may not yield the expected near-term financial returns.

This divergence highlights a significant shift in market dynamics, where investors are rotating money out of expensive hardware manufacturers into established software providers. For India, this software-led rally provides a cushion to the broader domestic indices amid volatile global capital flows. As global tech buyers focus on deploying software rather than purely investing in raw computing power, Indian IT companies stand to benefit from a sustained demand for digital transformation services. Investors will watch how this rotation affects long-term volatility in the Nifty IT index.