Why Infosys, TechM, Coforge are rising today?

18 May 2026 , 11:59 AM

Indian IT stocks witnessed strong buying interest today even as broader equity markets remained under pressure. While benchmark indices such as the BSE Sensex and Nifty 50 traded sharply lower, the Nifty IT index outperformed and remained firmly in the green.

Stocks like Tech Mahindra, Infosys, Coforge, and Persistent Systems led the rally as investors turned optimistic on improving global technology demand, rupee depreciation benefits, and long-term artificial intelligence opportunities.

IT Sector Outperformed Weak Broader Markets

Indian benchmark indices remained under selling pressure during Monday’s trading session, with the BSE Sensex and Nifty 50 declining over 0.6%. However, the IT sector emerged as one of the strongest pockets in the market.

The Nifty IT index gained more than 1%, with all constituent stocks trading in positive territory. Investors rotated into export-oriented technology companies amid expectations of stronger earnings visibility and improving global sentiment.

Among the top gainers:

• Tech Mahindra surged more than 3%
• Coforge climbed over 2%
• Persistent Systems advanced more than 2%
• Infosys gained over 1%

Rupee Weakness Boosted IT Stocks

One of the biggest triggers behind the rally in IT stocks was the sharp depreciation in the Indian rupee.

The rupee weakened to a record low of around ₹96.25 against the US dollar, which significantly improves revenue realisations for Indian IT exporters. Since most large Indian software companies earn a substantial portion of their revenue in US dollars, a weaker rupee directly benefits earnings when converted into Indian currency.

Companies including Infosys, Tata Consultancy Services, Wipro, and HCL Technologies derive a major share of their revenue from North America, making them highly sensitive to currency movements.

Weak Rupee Can Improve Profit Margins

A depreciating rupee not only boosts reported revenues but can also improve operating margins for export-driven IT firms.

Most Indian technology companies incur a large portion of their expenses in rupees while earning revenues in foreign currencies. As a result, dollar-denominated income becomes more valuable after conversion into rupees, helping profitability.

This currency tailwind often leads investors to increase exposure to IT stocks during periods of rupee weakness.

Positive Signals From US Technology Stocks

Another key factor supporting Indian IT shares was the continued strength in US technology stocks.

Global investors remain optimistic about enterprise technology spending, cloud adoption, cybersecurity investments, and digital transformation demand. Strong performance from major US technology companies has improved sentiment toward the broader global IT sector.

Indian IT firms are closely linked to the US economy because a significant share of their business comes from American clients across banking, healthcare, retail, manufacturing, and technology sectors.

Improving macroeconomic conditions in the US have strengthened hopes that discretionary technology spending may gradually recover after a subdued period over the last few quarters.

AI and Digital Transformation Theme Continues to Support IT Stocks

The long-term artificial intelligence opportunity also remains a major positive driver for Indian IT companies.

Firms such as Infosys, Tata Consultancy Services, Wipro, and HCL Technologies are aggressively expanding their capabilities in:

• Artificial intelligence services
• Cloud migration
• Data analytics
• Automation
• Enterprise modernisation
• Digital engineering

While Indian IT companies are not viewed as direct AI product leaders like major US technology giants, investors believe they are well-positioned to benefit from rising global demand for AI implementation and enterprise transformation services.

As companies worldwide increasingly adopt AI-driven workflows and automation solutions, Indian IT service providers are expected to play a major role in integration, deployment, maintenance, and consulting services.

Outlook for the IT Sector

Market participants believe the combination of rupee depreciation, improving US demand outlook, and growing AI adoption could continue to support Indian IT stocks in the near term.

Although concerns around global growth and client spending remain, investors appear increasingly optimistic that the sector may witness stronger deal activity and improved revenue momentum over the coming quarters.

With export earnings benefiting from currency movements and digital transformation demand remaining intact, IT stocks are once again emerging as a key defensive and growth-oriented segment within the Indian equity market.

Disclaimer – The stock/s and indices mentioned in this article is discussed solely for informational and educational purposes. It should not be construed as investment advice or a recommendation to buy or sell any securities. Investors should conduct their own research or consult a financial advisor before making any investment decisions. Investments in securities market are subject to market risks. Read all the related documents carefully before investing.