Indices rebound on IT-led rally, emerge as top performers in Asia

Benchmark equity indices rebounded on Tuesday, led by a rally in IT stocks after strong results from TCS and HCL Technologies triggered buying in the sector. The Nifty IT Index surged 5.22%, recording its biggest single-day gain in 17 months (since May 12, 2025).

A decline in Brent crude prices and Finance Minister Nirmala Sitharaman’s remarks that the government was willing to hear stakeholders’ views on the removal of long-term capital gains (LTCG) tax also boosted investor sentiment.

Logging best gain in four months, the Sensex surged 1,109.10 points, or 1.54%, to close above the 73,000 mark at 73,033.78, while the Nifty gained 358.60 points, or 1.60%, to end the session at 22,721.95. Both indices emerged as the top performers in Asia.

In contrast, equity indices in South Korea and Taiwan, a major beneficiary of the region’s AI-led boom, were among the top losers, declining 5.46% and 1.95%, respectively.

“Indian equities advanced as stronger-than-expected technology earnings boosted confidence in corporate profit growth and lifted benchmark-heavy large-cap stocks,” said Vinod Nair, Head of Research, Geojit Investments. Stability in the rupee and easing bond yields further supported sentiment, bringing financial stocks into focus.

However, with inflation near the upper end of the RBI’s tolerance band and geopolitical uncertainty keeping energy markets volatile, policymakers are likely to remain cautious about macroeconomic stability, potentially keeping markets range-bound, Nair added.

“Indian equities are likely to extend their recovery in the near term, supported by improving sentiment following Finance Minister Nirmala Sitharaman’s remarks that the government is willing to hear stakeholders’ views on removing the LTCG tax,” said Siddhartha Khemka, Head of Research, Wealth Management, Motilal Oswal Financial Services.

Any potential change could further improve investor sentiment and support equity market participation, although no formal proposal has been announced so far, Khemka added.

Foreign portfolio investors sold shares worth Rs 1,305.13 crore, while domestic institutional investors purchased shares worth Rs 2,439.24 crore, according to provisional data released by the exchanges.

Investors’ wealth increased by Rs 4.62 lakh crore, of which major IT companies contributed Rs 1.29 lakh crore. The total market capitalisation on the BSE stood at Rs 470.08 lakh crore.

Market breadth remained positive for the third consecutive session, with 2,518 gainers against 1,834 losers on the BSE.

Among sectoral indices, IT led the gains, followed by realty, consumer durables, financial services and PSU banks. Pharma was the only sector to end in negative territory, recording a modest decline.

Broader markets, however, underperformed the benchmarks. The Nifty Midcap 100 rose 1.06%, while the Nifty Smallcap 100 recovered sharply from early losses to end 0.11% higher.

IT companies occupied the top four spots among the Sensex gainers. HCL Technologies led the pack with an 8.3% rise, followed by TCS (up 6.6%), Tech Mahindra (up 4.9%) and Infosys (up 4.4%).