Indian IT stocks staged a strong recovery with shares of Tata Consultancy Services, Infosys, Wipro, and other technology companies rising despite concerns over the US government's suspension of several firms from its green-card programme. The rally comes as investors reassess the immediate impact of the US restrictions, while bargain buying after the previous session's sharp market sell-off is adding to gains. TCS's September-quarter results, particularly its strong growth in artificial intelligence-related revenue, have also supported sentiment.
The BSE Sensex traded higher, while the Nifty IT index rose significantly, making it one of the strongest-performing sectoral indices in early trade. Major technology equities posted solid gains, reflecting renewed buying interest across the board.
The US government has suspended several major technology companies, including TCS, Infosys, Wipro, HCLTech, Cognizant, Capgemini, Microsoft, and Adobe, from the Permanent Labour Certification programme, a key step in the employment-based green-card process. The move had raised concerns about the potential impact on Indian IT companies with a significant presence in the US. However, clarifications from companies have helped investors assess the immediate implications more closely.
TCS stated that it did not expect the suspension to affect its US workforce strategy or customer engagements, noting that its PERM applications had been in single digits over the past two years. The company also reiterated its plan to hire an additional 15,000 people in the US over the next five years, anchoring its workforce strategy in local hiring. Microsoft indicated that the majority of its H-1B visa petitions were for current employees, addressing its use of that programme while highlighting its distinction from the PERM process.
Another key reason behind the rally is bargain buying following a sharp market sell-off that had pushed benchmark indices to multi-year lows. When share prices fall sharply over a short period, investors frequently look for opportunities to buy companies deemed cheaper relative to their long-term earnings potential. IT stocks saw this kind of buying as market participants reassessed the US announcement alongside company-specific developments.
TCS's September-quarter results provided an additional trigger for the sector's recovery. The company reported a strong consolidated net profit and higher revenue compared to the previous year. A major positive was the performance of its artificial intelligence business, with annualized AI revenue increasing notably quarter-on-quarter and crossing a substantial portion of overall revenue.
Despite the recovery, risks to the broader market remain present. Foreign institutional investors have continued to sell Indian equities, while elevated crude oil prices and high US bond yields continue to weigh on sentiment. Market strategists note that these external pressures can maintain volatility, even as ongoing corrections create selective opportunities for long-term investors to accumulate quality assets.