Why Indian IT Stocks Are Rising: AI Spending Outlook

The short version

• TCS gained over 2.50% and HCLTech rose more than 3% during Thursday's trading session.
• Investors turned to traditional IT services stocks following Accenture's outlook on technology spending for the next financial year.
• TCS and HCLTech's recent quarterly results and margin performance added to the positive sentiment around large cap IT companies.

Indian IT stocks rose on Thursday despite weakness across Asian markets, with TCS, HCLTech, Tech Mahindra, Infosys and Wipro trading higher. The Nifty IT index gained more than 2%, while buying in technology shares helped lift the broader Nifty index by around 2.15%, according to the figures provided for the session.

The rally followed renewed interest in traditional IT services companies as investors assessed the outlook for artificial intelligence spending and conventional technology budgets. Accenture's guidance on technology expenditure for the next financial year was cited as a factor behind the move. Recent quarterly results from TCS and HCLTech also supported sentiment, with both companies reporting better than expected revenue and margins, as described by market analyst Seema Srivastava of SMC Global Securities.

Which IT stocks gained on Thursday?

Large cap IT shares led the advance, with several major companies recording gains even as broader Asian markets faced selling pressure. L&T Technology Services was the exception among the IT stocks covered in the source material, while the other named companies traded in positive territory.

IT stock or index	Reported movement
TCS	Up more than 2.50%
HCLTech	Up more than 3%
Tech Mahindra	Up nearly 3%
Infosys	Up around 2.25%
Wipro	Up more than 1.50%
Nifty IT index	Up more than 2%
Nifty index	Up around 2.15%

These figures describe the trading session covered by the source and should not be treated as current live prices. The available information does not provide closing prices or the exact percentage gains at the end of the session.

The gains were notable because Indian equities were moving against weakness elsewhere in Asia. Market participants were looking at whether changing expectations for AI spending could redirect interest towards established IT services companies in emerging markets.

Why the anti AI trade is drawing attention

The rally has been linked to what market participants describe as an anti AI trade. In this context, the phrase refers to investor interest in established technology services businesses as expectations around AI related spending and its effect on conventional IT budgets change.

Accenture's guidance for the next financial year was cited as a trigger for this reassessment. The expectation of continued spending on traditional technology services may have helped investors reassess the near term outlook for large Indian IT companies. However, the available source does not provide Accenture's exact guidance figures or a detailed breakdown of the spending categories involved.

Srivastava said large cap Indian IT companies could benefit more than vendor focused IT companies from this market theme. She also pointed to the recent quarterly performance of TCS and HCLTech, which reported improved revenue and margins in their second quarter results for 2026.

The distinction matters because an increase in technology budgets does not automatically translate into equal gains for every IT services provider. The effect depends on the type of work clients commission, the companies' service mix and their ability to convert demand into revenue and margins. The source, however, does not provide company level estimates for how much additional business might come from traditional technology spending.

For broader context on the sector's recent market movements, WeloMoney has covered why Indian IT stocks fell in September. The latest advance shows how quickly sentiment around the same sector can change when investors reassess spending expectations and earnings performance.

Can foreign investors return to Indian equities?

Foreign portfolio investor flows are another factor cited in the market commentary. Srivastava said foreign investors had moved towards other emerging markets, including South Korea and Taiwan, in earlier periods. The current interest in traditional IT services companies could encourage some investors to reconsider Indian equities if they expect established technology businesses to benefit from changes in AI related spending.

That remains an expectation rather than a confirmed change in foreign investment flows. The source does not provide daily FPI purchase figures or evidence showing that foreign investors had already returned to Indian IT stocks during the session.

Currency expectations were also mentioned as a possible influence. The source states that the Indian government had raised around $144 billion through FCNR bonds, which was expected to support the rupee. It does not provide a detailed breakdown of the amount, the time period involved or the mechanism through which the funds would affect foreign exchange markets.

Srivastava also cautioned that more clarity was needed on the use of these funds. She referred to an additional return pressure of around 6% for the government. The source does not explain the calculation behind this figure, so the precise fiscal implications cannot be established from the information available.

A stronger rupee could influence foreign investors' returns when they convert Indian investments back into their home currencies. However, currency movements alone do not determine whether foreign investors buy Indian shares. Corporate earnings, valuations, global risk appetite and the relative performance of other markets also affect investment decisions.

TCS share price outlook: levels to watch

Sumeet Bagadia, executive director at Choice Broking, described TCS as bullish on technical charts. He said the stock had recently broken above a technical level at Rs 2,250 and identified support at Rs 2,260, with potential upside levels between Rs 2,450 and Rs 2,500.

The figures supplied place the stated support above the cited breakout level. No additional chart data is available to explain this difference, so the levels should be read as the analyst's stated technical assessment rather than a verified price sequence.

TCS technical level	Price
Reported breakout level	Rs 2,250
Immediate support cited	Rs 2,260
Potential upside range	Rs 2,450 to Rs 2,500

These are analyst estimates, not confirmed future prices. Technical support refers to a level where buying interest may emerge, while a breakout describes a move beyond a price level that traders are watching. Neither guarantees that the stock will continue to rise.

HCLTech share price outlook: support and targets

Bagadia also gave a positive technical assessment of HCLTech. He said the stock had broken above Rs 1,380, identified support at Rs 1,320 and cited possible upside levels of Rs 1,450 and Rs 1,500.

HCLTech technical level	Price
Reported breakout level	Rs 1,380
Support level cited	Rs 1,320
First potential upside level	Rs 1,450
Second potential upside level	Rs 1,500

The target levels are the analyst's technical estimates. The source does not include a timeframe for reaching them or specify the conditions under which the targets could be achieved. Actual price movement will depend on market conditions and company specific developments.

Investors tracking the sector can also review WeloMoney's coverage of the Indian market's gains led by HCLTech to compare the role of technology shares in a broader market advance.

What investors should watch

The immediate question is whether the buying in IT stocks is supported by further evidence of demand and earnings strength. A single session of gains does not establish a lasting change in market direction. Investors will be watching subsequent quarterly results, management commentary on client spending and changes in revenue and margins.

The following developments are worth tracking:

• Whether TCS and HCLTech sustain revenue growth and margins in subsequent quarters.
• Whether Accenture's technology spending outlook translates into stronger demand for Indian IT services.
• Whether foreign portfolio investors increase their purchases of Indian equities.
• Whether the rupee strengthens and whether the government's FCNR bond plans become clearer.
• Whether TCS and HCLTech move towards the technical levels cited by Bagadia.

The next earnings updates and clearer information on technology spending will help establish whether the rally reflects improving business expectations or a temporary shift in market positioning.

Frequently asked questions

Why are Indian IT stocks rising?

Indian IT stocks are rising amid renewed interest in traditional technology services spending and recent earnings performance from large companies. Accenture's outlook for the next financial year and improved revenue and margins reported by TCS and HCLTech were cited as factors behind the rally.

How much did TCS and HCLTech shares gain?

TCS shares rose more than 2.50%, while HCLTech gained more than 3% during the trading session described in the source. The figures are session specific and do not establish their latest prices or final closing gains.

What are the TCS share price targets mentioned by Choice Broking?

Choice Broking executive director Sumeet Bagadia cited potential TCS price levels of Rs 2,450 to Rs 2,500. He identified Rs 2,250 as the reported breakout level and Rs 2,260 as immediate support.

What are the HCLTech share price targets?

Bagadia cited Rs 1,450 and Rs 1,500 as potential HCLTech price levels. His technical assessment identified a breakout at Rs 1,380 and support at Rs 1,320.

What is the anti AI trade in Indian IT stocks?

The anti AI trade described in the market commentary refers to investor interest in traditional IT services businesses as technology spending expectations change. The source links this interest to Accenture's outlook and recent quarterly performance from TCS and HCLTech.

Could foreign investors return to Indian stocks?

Foreign investors could reconsider Indian equities if traditional IT services companies benefit from changing technology spending patterns. However, the source does not provide confirmed FPI flow data showing that such a return had already occurred.