The stock market staged a rebound, with the Sensex jumping over 800 points and the Nifty approaching the 22,500 mark, as investors bought beaten-down stocks and IT shares rallied despite concerns over the US government's green-card restrictions on major technology companies.
The recovery came as a surprise after a sharp sell-off in the previous session, as investors had feared further pressure on IT stocks after the US government suspended TCS, Infosys, Wipro, and HCLTech, among other firms, from the Permanent Labour Certification programme, a key step in the employment-based green-card process.
However, clarifications from companies about the limited use of the US Permanent Labour Certification programme, coupled with TCS's latest quarterly results and bargain buying after the recent correction, helped lift market sentiment.
The BSE Sensex traded notably higher in morning trade, while the Nifty 50 also registered solid gains after opening higher. The market rally was broad-based, with all major broad-market indices, including midcap and smallcap segments, trading in positive territory.
The biggest boost came from IT stocks, which had previously been under pressure amid concerns over US green-card restrictions and the outlook for technology spending. The Nifty IT index surged in early trade, emerging as the strongest-performing sectoral index.
Major technology firms saw their shares advance significantly. The rally was notable because IT stocks had been expected to face prolonged pressure following the US government's suspension of several tech companies from the labour certification programme.
Companies subsequently began clarifying how much they rely on the programme, helping investors assess the immediate impact rather than react solely to headlines. TCS informed stock exchanges that its applications had been in single digits over the past two years, stating that the suspension would not affect its workforce strategy or customer engagements. The company also reiterated plans to hire thousands of people in the US over the next five years, emphasizing a local talent strategy.
Another important factor behind the rally was bargain buying. Following the previous day's steep plunge, several stocks became cheaper than they had been prior to the sell-off, creating opportunities for investors looking to purchase companies with long-term growth potential.
This buying of the dip helped trigger a rebound as fresh demand supported share prices and short covering added to the upward momentum. However, market observers noted that the gains could partly reflect a technical recovery, and investors may continue to respond sharply to global cues.
The broader market's performance indicated that buying was not limited to the technology sector, with fast-moving consumer goods, public sector banks, financial services, auto, metal, and healthcare indices also trading higher. A drop in India VIX, the measure of expected market volatility, pointed to an easing of near-term market anxiety.
Additionally, TCS's September-quarter results provided vital support for IT sentiment. The firm reported a double-digit increase in consolidated net profit and revenue growth compared to the previous year, alongside strong annualized artificial intelligence revenue growth that crossed a notable milestone.
While the strong performance in artificial intelligence and robust contract values offered positive indicators of business momentum, overall sequential revenue growth remained modest and discretionary technology spending faced continued scrutiny. Investors ultimately balanced these mixed signals against attractive valuations following the prior session's market correction.