Indian information technology stocks rebounded on Friday, October 9, as investors looked beyond US restrictions affecting several companies’ participation in the employment-based green-card process. Tata Consultancy Services (TCS), Infosys and Wipro led the recovery, supported by company clarifications, bargain buying after the previous session’s sharp sell-off and optimism surrounding TCS’s artificial intelligence business. The rally came despite continuing concerns about global economic conditions and foreign investor outflows.

TCS shares climbed 4.62% in early trade, while Infosys gained 3.12%, Wipro rose 3.31% and Tech Mahindra advanced 2.19%. LTM, Persistent Systems and Mphasis also recorded gains. The Nifty IT index rose 3.31% to 28,654.70, making it one of the strongest-performing sectoral indices. At the time of reporting, the BSE Sensex was up 602.01 points, or 0.84%, at 72,195.25, while the Nifty 50 gained 207.70 points, or 0.93%, to 22,439.50.

The US government’s suspension of several major technology companies, including TCS, Infosys, Wipro, HCLTech, Cognizant, Capgemini, Microsoft and Adobe, from the Permanent Labour Certification programme had raised concerns about their US workforce strategies. TCS told stock exchanges that it did not expect the action to affect its US workforce plans or customer engagements, noting that its PERM applications had been in single digits over the previous two years. The company also reiterated its plan to hire 15,000 additional employees in the United States over the next five years, emphasising local recruitment. Microsoft separately clarified that most of its H-1B visa petitions were for existing employees. The PERM restrictions concern a stage of the employment-based green-card process and are distinct from a blanket suspension of H-1B visas.

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Buying by investors seeking opportunities after Thursday’s sharp market decline also contributed to the recovery. The Sensex had fallen 1,045 points, or 1.44%, while the Nifty dropped 1.64%, putting pressure on several stocks. Such declines can attract investors who believe share prices have fallen below their longer-term earnings potential. However, a rebound following a steep sell-off does not necessarily indicate that a market bottom has been reached, and prices could remain volatile if fresh concerns emerge.

TCS’s September-quarter results provided another source of support. The company reported consolidated net profit of Rs 13,884 crore for the second quarter of FY27, up around 15% from Rs 12,075 crore a year earlier, while revenue increased 11.2% year-on-year to Rs 73,188 crore. Annualised revenue from its AI business rose nearly 20% sequentially to $3.1 billion, crossing 10% of total revenue, while quarterly contract value reached $9.6 billion. However, revenue grew only 0.5% sequentially in constant currency terms, suggesting that broader demand remained subdued despite strong AI-related momentum.

Market risks nevertheless remain, including continued foreign institutional investor selling, elevated crude oil prices and high US bond yields. Geojit Investments Chief Investment Strategist V K Vijayakumar said these pressures had encouraged a near-term “sell on rally” approach, adding that foreign investors had sold Indian equities worth Rs 36,210 crore through exchanges in October up to the time of his assessment. Brent crude traded at $102.91 per barrel after falling 1.31%, while US West Texas Intermediate declined 1.14% to $90.45. Friday’s gains reflect a combination of company-specific developments and bargain buying, but the rally’s durability will depend on global conditions and whether earnings growth strengthens across the IT sector.

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