Indian IT index jumps 17.7% in strongest month in more than six years
India's IT index climbed 17.7% in October, its strongest monthly performance in more than six years, as the Nifty 50 snapped a two-month losing streak to close the month up 1.9% at 23,053.1. The Sensex gained 2.7% over the month and added 0.42% on Friday to 74,459.53, while the Nifty rose 0.51% in the final session.
The four largest Indian software firms led the benchmark's gainers: Tata Consultancy Services, Infosys, HCLTech and Tech Mahindra rose between 16% and 22%. Kranthi Bathini, director of equity strategy at Wealthmills Securities, said IT stocks remain near historical averages in terms of valuations, even as visible AI-led revenues begin to validate efficiency gains for Indian software companies. He added that India remains a hedge for investors looking beyond pure-play AI trades, which is also fuelling bottom fishing in the sector.
Jio Platforms, which became India's second-most valuable company after its stock market debut on Wednesday, has risen about 28% since listing. Investors were awaiting its results later in the day, along with those of parent Reliance Industries, which Bathini said could set the near-term tone for the market.
Broader earnings offered little to frighten investors. Trent rose 15.1% on steady demand and upbeat quarterly results, while Kotak Mahindra Bank gained 10.7% after beating profit estimates, with brokerages pointing to faster loan growth and potential margin recovery. Bathini said September-quarter earnings had largely beaten expectations, and that reports the government may consider cutting long-term capital gains tax had added a further tailwind. The tax, abolished in 2004, was reintroduced in 2018 at 10% and raised to 12.5% in 2024.
Small-caps and mid-caps fell 4.2% and 3.4% respectively over the month, retreating from record highs scaled in the previous two months, while a rise in crude prices amid lingering Middle East tensions capped the indexes' gains.
