Nifty IT rises on Q1 optimism despite AI concerns

Indian IT stocks climbed up to 4% on Tuesday, lifting the Nifty IT index by around 2.6%, as investors positioned for June quarter earnings despite ongoing worries that artificial intelligence could weigh on revenue growth.

The rebound in Indian software exporters came even as AI linked concerns triggered a sharp selloff in South Korea’s chipmakers and the KOSPI index, highlighting diverging market reactions to the technology theme.

Market Overview

Index	7 Jul 2026 Close (approx.)	Move & % Change	Comments
Nifty IT	approx. sectoral level	+2.6% (intraday)	Opened higher as large-cap IT stocks advanced.
Nifty 50	24,398.70	-31.65 pts (-0.1%)	Headline index eased despite IT sector rebound.
KOSPI (South Korea)	7,656.31	-395.02 pts (-4.9%)	Fell up to 8.2% intraday, circuit breakers triggered.

Note: figures are approximate; final exchange data not available at time of publication.

• Nifty IT outperformed the broader market with a 2.6% early gain.
• Nifty 50 slipped marginally, indicating sector specific strength in IT.
• KOSPI is now down 16% from its 22 June record close of 9,114.55.
• KOSPI remains up 82% year to date despite the latest correction.

Key Movers

Top Gainers	Sector	Notable Factor
Infosys	IT services	Rose nearly 4% as investors positioned for Q1 results.
Tech Mahindra	IT services	Gained 3.4% on earnings optimism.
TCS	IT services	Advanced 3%, aiding Nifty IT index rebound.
Mphasis	IT services	Climbed 3% alongside broader IT pack.

Top Losers	Sector	Notable Factor
Wipro	IT services	Slipped 0.4% despite sector recovery.
Samsung Electronics	Semiconductors	Closed down 6.9%, after over 10% intraday fall.
SK Hynix	Semiconductors	Ended 6.1% lower, high volatility in AI linked chips.

• Infosys led gains among Indian IT majors with a near 4% rise.
• TCS, Tech Mahindra and Mphasis added between 3% and 3.4%.
• Wipro underperformed, edging lower despite sector wide buying.
• Samsung fell even after forecasting a 19 fold jump in Q2 operating profit.
• SK Hynix and other Korean chip stocks dragged the KOSPI lower.

Sectoral Action

Sector/Index	Direction (approx.)	Key Drivers
Indian IT (Nifty IT)	up 2.6%	Q1 earnings positioning, bargain hunting after steep correction.
Korean Semiconductors	down 5-10%	AI valuation concerns after strong year to date rally.

• Indian IT stocks rebounded after months of selling linked to AI concerns.
• Korean chipmakers corrected as investors questioned AI earnings sustainability.
• Circuit breakers hit KOSPI, sixth instance this year amid semiconductor volatility.

Valuation Damage And AI Overhang

Statistic	Value/Change	Context
Market cap loss, 10 major Indian IT firms	>₹17 lakh crore	Reflects peak to current erosion on AI and demand worries.
TCS share price decline	-56% from ₹4,592.25 to approx. ₹2,033	Largest value destruction among Indian IT majors.
TCS market cap change	₹16.48 lakh crore to ₹7.36 lakh crore	Over ₹9.12 lakh crore wiped out from peak.
Infosys share price decline	From ₹2,006.45 to ₹1,006	Market value down from ₹8.30 lakh crore to ₹4.08 lakh crore.
Wipro share price decline	-54% from peak	Reflects sector wide derating.
LTIMindtree share price decline	>53% from peak	Hit by similar AI and spending concerns.

• Across major IT names, market cap erosion exceeds ₹17 lakh crore from peaks.
• TCS has seen the sharpest value loss among large caps.
• Infosys has nearly halved from its December 2024 high.
• HCLTech, Persistent Systems, Mphasis and Tech Mahindra also saw sharp declines.
• Investors worry AI could hurt billing growth and manpower linked revenue.
• Concerns include passing productivity gains to clients, pressuring margins.

Earnings Outlook And AI Narrative

• Investors are positioning ahead of June quarter earnings for Indian IT.
• Upcoming management commentary is seen as crucial for sentiment.
• Broker expectations point to a muted Q1 and subdued Q2 commentary.
• Organic revenue growth for large caps is projected around 1.5-3.5%.
• Wipro is expected to see revenue decline, as per these estimates.
• Risks are flagged to FY27 revenue guidance ranges for the sector.
• Valuation concerns persist, including premium of TCS versus global peers.
• Market will watch if firms can defend margins amid AI driven productivity.
• A key focus is whether AI can support revenue, not only reduce client costs.

Global Cues

Market/Asset	Movement	Notes
US software stocks	up to 7%	Lifted by bullish AI view from Guggenheim.
Accenture, Cognizant, IBM	up to 7%	Rally provided positive cues for Indian IT shares.
KOSPI	-4.9%	AI worries triggered selloff in chipmakers despite strong profit outlook.

• US software rally on AI optimism supported sentiment in Indian IT.
• Divergence persists between hardware centric AI plays and services led Indian IT.
• Global volatility in AI exposed names is feeding into domestic valuation debates.

Frequently Asked Questions

Why did Indian IT stocks rise despite AI related concerns?

Indian IT stocks gained as investors positioned for June quarter earnings and bargain hunted after a steep correction exceeding ₹17 lakh crore in sector market value, even though worries remain that AI could pressure billing and manpower linked revenue.

How badly have major Indian IT companies been hit since their peaks?

From their peaks, TCS is down about 56% with over ₹9.12 lakh crore in market cap wiped out, Infosys has nearly halved, while Wipro and LTIMindtree have fallen more than 50%, contributing to an estimated ₹17 lakh crore erosion across 10 major IT firms.

What is the current earnings outlook for large cap Indian IT firms?

Broker expectations indicate a muted first quarter and subdued second quarter commentary, with organic revenue growth for most large cap IT firms projected around 1.5-3.5%, and Wipro expected to see a decline, keeping guidance risks for FY27 in focus.