India's Nifty IT index surged 11.7 percent over the week to record its sharpest weekly advance since October 2008. The sectoral index climbed 3.9 percent on Friday to finish at 31,924, touching its highest closing level since February 22. The sharp rebound added approximately 2.8 lakh crore rupees to the aggregate market capitalization of constituent technology firms.
On Friday, October 16, 2026, foreign portfolio investors registered their first net equity purchase since September 23 by buying shares worth ₹1,166 crore, following net sales of about ₹13,700 crore between October 9 and 15.
Investor demand returned following stronger September quarter earnings that mirrored robust global guidance from IT bellwether Accenture. Master Capital Services chief research officer Ravi Singh noted that better quarterly numbers and value buying catalyzed the recovery. Singh highlighted that strong operating performances from Tier 1 vendors like HCLTech drew institutional capital back into heavily discounted stocks. Nifty IT constituents accounted for 7.52 percent of the benchmark Nifty by weighting at the close of the September quarter.
India's software export sector is showing clear operational stabilization following nearly two years of strict cost controls and subdued revenue growth. Quarterly revenue expansion averaged between 2 and 2.5 percent sequentially, while rupee-reported revenues increased by 11 to 15 percent year-on-year. Hiring trends reflected renewed operational confidence, with Tata Consultancy Services onboarding 24,000 campus graduates in the first half of the fiscal year. HCLTech similarly expanded its delivery workforce by adding 6,450 net employees during the second quarter. Despite the weekly surge, the technology benchmark remains down 16 percent year-to-date, while the broader Nifty gained 2.8 percent during the week.
Legacy Indian IT services equities are increasingly functioning as an institutional portfolio hedge against volatile global artificial intelligence investments. While Indian software firms surged, semiconductor-centric Asian markets suffered sharp declines as global technology rotations shifted. South Korea's Kospi plummeted nearly 14.5 percent during the week to post its steepest weekly decline since October 2008. Equities in Japan and Taiwan dropped approximately 5 percent each, reflecting acute profit-taking across hardware and foundry manufacturers. Among Indian software majors, Tech Mahindra led the sector rally with an 18 percent weekly surge. TCS and Infosys advanced 14 percent each, while Wipro and HCLTech climbed 13.5 percent over the five trading sessions. Mid-cap technology providers also advanced, with LTIMindtree gaining 8 percent and Mphasis rising 6 percent.
Artificial intelligence capabilities are translating directly into top-line business, with TCS generating annualized AI revenue of 3.1 billion dollars. This commercial portfolio represents more than 10 percent of total revenues at TCS, while HCLTech's advanced AI division grew 78 percent year-on-year. Vallum Capital chief executive Manish Bhandari observed that Indian IT enterprises are actively adapting their core service models to embed AI capabilities. Bhandari noted that fixed-price and outcome-based contracts are steadily supplanting traditional time-and-materials billing models to protect operating margins. From a vertical perspective, banking and financial services remains the strongest revenue contributor, while European demand is improving alongside uneven North American spending.
