NIFTY IT index jumps over 5% in 2 sessions; 3 reasons why IT stocks are in focus today as well

The rally in the IT pack and individual stocks could be attributed to a few positive developments in the past few sessions.

Infosys buyback

Shares of Infosys, the IT bellwether, will continue to be in focus as the company's board is slated to meet today to consider the share buyback proposal.

If approved, this will be the fifth buyback by the IT services major.

The stock of the company has rallied nearly 7% in the past two sessions, following the share buyback proposal.

The IT major's last share buyback took place in 2022, when the company spent ₹9,300 crore to buy shares with a maximum buyback price of ₹1,850 per share.

The buyback announcement by the company boosted investor sentiment not only for Infosys but also for other IT stocks as well.

Analysts believe that now other IT companies will also think about share buybacks, thereby rewarding investors and making the stock attractive again.

CLSA on TCS

CLSA, according to news reports, is positive on TCS on the back of its attractive valuation and positive narratives around a share buyback, US Fed rate cuts, global AI spending and the resolution of the US-India trade war, which could lead to a stock rerating.

While the broader demand commentary remains unchanged from Q1 FY26, management sounded upbeat about revenue opportunities from AI, CLSA wrote in its note, the report added.

TCS's management said that overall IT budgets are likely to expand due to AI, creating a net revenue-positive effect for the company.

CLSA also said that with Infosys proposing a fresh share buyback, it believes there could be incrementally more pressure on Tata Consultancy Services (TCS) to undertake a similar move as a confidence-building measure amid an overall weak demand environment.

It believes the company may opt for a tender offer-style buyback of about ₹20,000 crore, as per a report by CNBC-TV18.

Oracle's monster rally

Sentiment is positive as Oracle Corporation, the global technology company, garnered massive gains on Wall Street in Wednesday's session. Oracle shares surged about 43% to a record high on Wednesday, putting the company on track to join the elite trillion-dollar club and propelling co-founder Larry Ellison closer to the top of the world's richest list.

The stock skyrocketed after the company unveiled four multi-billion-dollar contracts on Tuesday, amid an industry-wide shift, led by companies such as OpenAI and xAI, to aggressively spend to secure the massive computing capacity needed to stay ahead in the AI race.

Following the monster rally, Oracle Financial Services Software Limited (OFSS), the Indian subsidiary of Oracle Corporation, was trading over 3.6% higher in the opening deals.

However, in its filing to stock exchanges on Thursday, the company issued a clarification saying that Oracle Corporation's massive rally owing to the multiple deals has no direct impact on OFSS business.

In the previous session, the stock jumped over 10%.

How shares are faring in Thursday's morning deals

The NIFTY IT index was trading 0.45% lower at 36,021.80 levels in the opening deals on Thursday, mainly on account of profit-booking. Among individual names, barring OFSS and TCS, all other constituents were trading in the red. Infosys was down around 1% ahead of the board meeting to consider share buyback.