Shares of Indian IT companies surged up to 4% in early trade on Wednesday, February 25, staging a sharp rebound after Tuesday’s sell-off wiped out nearly Rs 1.2 lakh crore in cumulative market capitalisation.

All 10 constituents of the Nifty IT index were trading in the green. Mphasis and Persistent Systems gained between 3% to 4%, while Coforge, LTIMindtree, Tech Mahindra, HCLTech, TCS, Infosys and Wipro advanced 2% to 3% in early trading.

The bounce comes after an intense correction on Tuesday, when eight out of the top 10 losers on the Nifty 500 index were technology stocks, highlighting the scale of the rout in the sector.

One key trigger behind Wednesday’s recovery was a relief rally in US software stocks overnight. Salesforce, which is set to report earnings later today, climbed over 4%. The rebound followed Anthropic’s announcement of partnerships with multiple SaaS companies, including Salesforce, signalling integration with software providers rather than disruption. Docusign and ServiceNow also gained between 1% to 2%.

Another supporting factor is technical positioning. Most Nifty IT stocks are now in oversold territory. Seven of the 10 index constituents have declined 20% or more in the first two months of the year. As of Tuesday’s close, the Nifty IT index was on track for its worst monthly performance since April 2003.

Several analysts, including Wedbush Securities, have suggested that fears of Anthropic-led disruption may be overstated, providing scope for a relief rally in the sector.

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