Nifty IT Rallies 3% After Nasdaq Rebound, Led by Coforge and Persistent Systems

The Nifty IT index surged 3% in early trade on April 8, bouncing back from months of persistent losses, tracking positive global cues and overnight gains in the U.S.-based tech-heavy Nasdaq Composite. The rally was led by mid-cap players Coforge, Persistent Systems, and Infosys, as investor sentiment turned mildly bullish after weeks of intense selling.

At 9:35 am, the index was up 1.2% near the 33,050 level, after opening higher by almost 3%. While the opening gains later moderated, the recovery reflects a temporary respite for the bruised Indian IT sector.

Nasdaq Boosts Global Tech Sentiment

The bounce in Indian IT stocks comes on the back of Nasdaq’s green close overnight, which ended a long bearish stretch that had dragged the index 14% down over the past month, officially pushing it into bear market territory.

Since Indian IT companies rely heavily on services exports to the U.S., the Nasdaq's performance often reflects investor expectations for future demand and deal flows from American clients. The recent Nasdaq recovery sparked hope that the worst of the selling might be behind for tech stocks globally.

Mid-Cap IT Stocks Outperform

Unlike previous sessions where large-cap IT firms bore the brunt of the sell-off, today's rally saw mid-cap IT stocks outshining.

• Coforge and Persistent Systems led the charge, showing strong buying interest.

• Infosys also posted gains, but relatively modest in comparison.

• Other notable mid-caps like Mphasis recovered after recent sharp declines.

In contrast, large-cap IT giants like TCS and Wipro showed less momentum, reflecting a selective rally focused more on value and potential upside in mid-caps.

Deep Losses Still Haunt the Sector

Despite today’s gains, the Nifty IT index remains deeply negative in the medium-term:

• Down 6% in the past one month

• Down 20% over the last six months, wiping off thousands of crores in investor wealth

In the previous trading session, the index had crashed 2.5% as global risk-off sentiment deepened fears about future sales and margins.

Tariffs, US Slowdown and Morgan Stanley Warning

Much of the bearishness stems from growing concerns over:

1. Slowing U.S. economic growth, especially in sectors that heavily outsource to India.

2. The impact of tariffs and new regulatory barriers affecting Indian IT exports.

3. Clients delaying or cancelling deals due to macroeconomic uncertainty.

In a note earlier, Morgan Stanley warned that global macro shifts and technological disruptions are likely to erode valuations and hurt revenue growth in the Indian IT sector going forward.

The brokerage firm highlighted that margin pressures, pricing challenges, and a longer deal conversion cycle could severely limit growth for Indian IT firms in FY26.

Investor Sentiment and Outlook

Today's bounce, while notable, may be more of a technical recovery than a fundamental shift.

• Many traders see this as an opportunity to book short-term profits rather than accumulate.

• Volatility remains high, with the Nifty IT index swinging significantly in the past few sessions.

• Institutional buying remains muted, with FIIs still cautious amid a shaky global outlook.

However, analysts also point out that most mid-cap IT stocks are now trading near historical support levels, offering some long-term value if macroeconomic conditions stabilise.

Conclusion: Short-Term Relief, Long-Term Uncertainty

While the 3% surge on April 8 is a welcome break from weeks of decline, the overall sentiment in the IT sector remains fragile. The heavy dependence on U.S. clients, rising protectionist policies, and margin pressures are still clouding the long-term outlook.

Coforge, Persistent Systems, and Infosys may continue to see short-term price action, but investors are likely to remain cautious until greater clarity emerges on U.S. tech demand, global growth, and tariff policies.

As of now, the rally serves more as a counter-trend bounce rather than a sustained reversal. The Nifty IT index must show consistent follow-through buying and reclaim key resistance levels before a meaningful sectoral recovery can be confirmed.

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