Indian information technology shares have surged over the past month, driven by a turnaround in foreign investment and optimism over US Federal Reserve rate cuts, despite a turbulent global tech environment.
Indian information technology shares have staged a broad recovery over the past month, with the Nifty IT index climbing 13.42% to 31,769.95 even as technology stocks elsewhere came under pressure from inflation worries and tensions around the Strait of Hormuz. Coforge led the advance among major names, while LTIMindtree, Tata Consultancy Services, HCL Technologies, Tech Mahindra and Infosys also posted solid gains. Wipro rose more modestly and Oracle Financial Services Software lagged the pack.
The rally has been supported by a return of foreign portfolio investor interest. Data from the National Securities Depository shows overseas investors bought ₹3,298 crore worth of IT equities in the second half of July, a sharp rebound from just ₹60 crore in the first half of the month. That followed heavy selling earlier in the year, including net outflows in April, May and June.
The renewed appetite for the sector reflects a shift in global rate expectations and better-than-feared earnings from large Indian IT companies. The Times of India, Moneycontrol and Business Standard reported that foreign investors bought ₹11,763 crore, or about $1.40 billion, of Indian IT stocks in July, the highest monthly inflow since the sector’s reclassification in 2022. Analysts have linked the buying to hopes of US Federal Reserve rate cuts, which could support corporate technology spending and improve sentiment towards export-oriented Indian software firms.
That optimism sits alongside a more uncertain global backdrop. Semiconductor and other technology shares have been volatile, with South Korea’s KOSPI and the Philadelphia Semiconductor Index both posting steep July declines, while US stocks slipped on Monday as Middle East tensions revived inflation concerns ahead of this week’s consumer price data. Nvidia also came under pressure after reports of a large financing plan tied to artificial intelligence infrastructure. For Indian IT companies, the key question is whether stronger cloud, AI and digital-transformation spending can outweigh any slowdown in overseas budgets.
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