25 Feb , 2026 By : Debdeep Gupta
Indian IT stocks rebounded on Wednesday after a sharp sell-off in the previous session with the Nifty IT index gaining over 2 percent, tracking a recovery in global and US technology shares. However, market participants cautioned that investor sentiment toward the sector remains fragile, with buying interest still limited despite the bounce.
At 9:45 am, the Nifty IT index was up 2.2 percent at 30,706.6, emerging as the best-performing sector on the NSE. The broader market was also firm, with the Sensex rising 460 points, or 0.6 percent, to 82,686 and the Nifty up 137 points at 25,562. India VIX slipped 6.36 percent to 13.25, indicating easing near-term volatility.
Among the top gainers on the Nifty 50, Tech Mahindra shares rose 2.4 percent to Rs 1,377.7, while Infosys climbed 2.3 percent to Rs 1,305. HCL Technologies stock advanced 2.2 percent to Rs 1,368.2, Tata Consultancy Services gained 1.9 percent to Rs 2,623, and Wipro was up 1.6 percent at Rs 203.29. Outside the Nifty 50, LTIMindtree rose 2.4 percent to Rs 4,605.85.
The rebound in IT stocks follows a strong overnight rally in global technology shares, with Wall Street benchmarks advancing after weeks of volatility linked to fears over artificial intelligence-led disruption. Sentiment improved after Anthropic said it plans to build partnerships around its Claude technology, easing concerns that its AI tools could displace existing business models rather than integrate with them.
Despite the recovery, analysts remain cautious on the sector. Speaking on CNBC-TV18, Pratik Gupta, CEO and Co-Head at Kotak Institutional Equities, said US investors have been driving the “AI scare trade” and remain underweight on India, particularly the IT sector. He said that despite the recent correction in IT stocks, investors are staying on the sidelines rather than buying the dip, reflecting a cautious near-term outlook, with local investors following global flows out of the sector.
Gupta warned that a slowdown in IT could weigh on discretionary consumption and lead to higher job losses among US-based IT employees. He added that business models in the IT services sector may need to adapt to AI-driven productivity gains, but stressed that the sector is not “dead”. While near-term visibility remains weak, he said global investors are beginning to reassess their underweight position on India.
The Nifty IT index had fallen over 4 percent on Tuesday, marking one of its steepest single-day declines in recent months, as fears around AI-led disruption triggered a broad-based sell-off across both large-cap and midcap IT stocks.
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