Indian shares posted their strongest one-day advance in four months as HCLTech’s robust earnings, a firmer rupee and hopes of a review of capital gains tax revived demand for beaten-down stocks.
Indian equities staged their sharpest one-day advance in four months on Tuesday, with information technology shares powering a broad recovery after HCLTech delivered stronger-than-expected quarterly results. The rebound also drew support from a firmer rupee and from Finance Minister Nirmala Sitharaman’s comments that the government was open to hearing investors’ views on long-term capital gains tax.
The Nifty 50 climbed 1.6% to 22,721.95, while the BSE Sensex rose 1.54% to 73,033.81. Both benchmarks posted their biggest gains since June 12 and put Indian stocks among Asia’s strongest performers for the session, with 46 Nifty constituents finishing in positive territory. According to Business Standard, the move marked the strongest day for domestic equities in four months.
The technology sector delivered the clearest signal that investors were willing to buy back into a group that has been under pressure for much of this year. The Nifty IT index surged 5.22% to 29,830.10, its best daily performance since May 12, 2025, and every one of its 10 members closed higher. HCLTech led the charge, rising 8.42% after reporting September-quarter net profit of ₹5,132 crore, up 21.2% from a year earlier, on revenue of ₹35,620 crore, up 11.5%. Its operating margin widened to 18.2%, while revenue from advanced artificial intelligence services increased 78% to $219 million, underscoring how investors are rewarding firms that can monetise AI-related demand even as the technology reshapes the sector.
Market participants said the rally also reflected a relief bounce in a segment that had been weighed down by concern that artificial intelligence could erode demand for traditional software services. Somil Mehta, head of retail research at Mirae Asset Sharekhan, told Business Standard that the IT pack had been oversold and that a wave of negative sentiment had left room for a sharp rebound. Some analysts have instead argued that Indian software exporters could benefit from rising enterprise spending on AI infrastructure and integration work, even if they are not building the chips themselves.
The move was not confined to technology. The Nifty MidSmall IT & Telecom index rose 2.77%, real estate gained 2.46%, consumer durables added 1.56%, fast-moving consumer goods climbed 1.40%, automobiles advanced 1.23% and metals rose 1.15%. Pharma was the only major sector to end fractionally lower. Banking shares also helped lift the broader market, with the Nifty Bank gaining 1.03% as IndusInd Bank, Yes Bank, HDFC Bank and ICICI Bank all advanced. Bandhan Bank jumped 9.21% after reports that Abu Dhabi-based International Holding Company planned to invest in its promoter, while Shriram Finance rose 6.31%.
Sitharaman’s remarks on the debate over long-term capital gains tax and securities transaction tax added a separate layer of support. Reuters reported that she said the discussion was healthy and that she wanted to hear stakeholders’ views, a statement that traders interpreted as a possible opening for review, even though no policy change was announced. Siddhartha Khemka, head of research for wealth management at Motilal Oswal, told Business Standard that Indian shares were likely to continue recovering in the near term if sentiment around the tax debate improved. The rupee strengthened to 95.28 per dollar from 95.78, extending a three-session gain of 1.6% and adding to the day’s constructive tone.
Broader Asian markets were less steady. South Korea’s Kospi fell 5.46% after sharp declines in heavyweight chipmakers SK Hynix and Samsung Electronics, as investors reacted to news that China’s ChangXin Memory Technologies plans to introduce a next-generation server memory chip by the end of 2026. That development stoked fears of increased competition and a possible supply glut in the memory market, although analysts cautioned against drawing conclusions too quickly. For India, by contrast, the session was a reminder that a sector-specific earnings beat, a softer domestic currency and a more conciliatory policy message can still trigger a powerful market response.
Despite Tuesday’s surge, the Nifty 50 remains lower for the week, the month and the past three months, showing that one strong session has not yet erased the broader pressure on Indian equities. Still, the scale of the rally suggests investors are willing to rotate back into beaten-down areas of the market when earnings, currency moves and policy signals all point in the same direction.
Disclaimer: This article is intended to inform and educate, not to recommend or endorse any financial product, investment or strategy. Please consider your own financial circumstances and seek professional advice where appropriate before making financial decisions.
