Indian IT Breaks Away From Global Tech Rout; 3 Reasons Behind the Rally

Stronger-than-expected earnings, better management commentary and valuation comfort helped the sector decouple from a deepening global AI-stock rout Quick Snapshot Nifty IT climbed 3.3% on Tuesday, led by a 10.2% surge in Coforge, even as Asian markets extended a selloff driven by AI valuation fears, per the Economic Times. Coforge’s Q1 FY27 revenue rose 49% YoY to ₹5,527.7 crore, with profit growth cited at 86% YoY in the sourced report. South Korea’s Kospi fell 5% on Wednesday after sinking over 10% to a three-month low a day earlier, even as SK Hynix’s profit missed forecasts, Reuters reported. Nifty IT is still down over 20% for 2026 despite the rally, against an 8.3% fall in the Nifty 50 — a valuation gap now pulling buyers back in. The Fed’s rate call, due later Wednesday, and earnings from Microsoft and Meta are the next big test for the global AI trade. Markets had priced in a rout across Asian tech stocks this week. Indian IT delivered a rally instead. As Asian chipmakers bled through a second straight session of AI-valuation panic on Wednesday, Nifty IT was moving in the opposite direction of the region’s playbook. A day earlier, the index had jumped 3.3%, led by a 10.2% spike in Coforge after its Q1 FY27 numbers beat a market that had quietly stopped expecting much from the sector. Instead of following the regional selloff, investors focused on improving earnings, better management commentary and attractive valuations in Indian IT. Nifty IT is already up 11.3% over the past month, versus a 0.3% fall in the Nifty 50. NiftyTrader Desk View Stock Key Trigger Trader View Coforge Surged 10.2% on the Q1 FY27 beat Extended its post-earnings breakout on heavy volumes TCS Among the top gainers in the pack Broad-based buying signals institutional re-entry Persistent Systems & Mphasis Both tracked the sector move Mid-cap IT participation stayed broad-based Tech Mahindra Rallied in line with peers Mirrored the sector’s coordinated bounce Track real-time institutional flows on the NiftyTrader FII-DII Tracker to see whether this move is backed by sustained buying, not just short covering. Risks Ahead: Fed Verdict and Big Tech Earnings The decoupling trade gets tested within hours. Microsoft and Meta report earnings later Wednesday, a gauge of AI capex sentiment after Alphabet and Tesla spooked markets last week, while the Fed’s call carries a live risk of a hawkish surprise. A sharp move in either could spill into Nifty IT given its global revenue exposure, even though Tuesday’s rally was domestically anchored. Bottom Line Tuesday’s session showed Nifty IT trading on its own earnings script, not the AI-driven chip selloff gripping Seoul and Tokyo. Coforge’s results supplied the spark; sector-wide participation from TCS to Tech Mahindra suggests it wasn’t a single-stock move. Whether this marks a durable split between India’s IT services trade and the global AI hardware trade, or just a one-day divergence, depends on how the Fed and Microsoft-Meta earnings shape risk appetite over the next 24 hours.