Market / Stocks

India's IT stocks just had their best week in 18 years

Results season just handed India's IT stocks their best week in 18 years: the Nifty IT index rose 10.4 percent, its biggest weekly gain since 2008, and Tech Mahindra jumped 8 percent on Friday. One good week has not erased the year, though. The index is still down about 16 percent.

Bengaluru, India · October 18, 2026

For most of this year the trade was a fear trade: AI would eat the outsourcing business, so investors sold the outsourcers. This week they bought them back. The Nifty IT index rose 10.4 percent on the week, its biggest weekly gain since the week ended October 31, 2008, outpacing every other major sector index and the benchmark Nifty 50, which rose 2.6 percent.

Earnings did the persuading. Tech Mahindra jumped 8 percent on Friday after second-quarter revenue of 161.80 billion rupees (about $1.71 billion) beat analyst estimates, helped by new deal wins of $1.02 billion, up 25.4 percent on the year. Wipro rose 5.8 percent on stronger than expected revenue, Infosys gained 3.9 percent and Tata Consultancy Services added 4.2 percent. Deal wins matter in this business because they are tomorrow's revenue, and a jump of that size in new work is hard to square with a model that is supposedly dying.

A global rotation helped. As AI-linked stocks sold off abroad, money went looking for value and found a sector that had already been marked down hard. Keep the perspective, though. Even after the best week in 18 years, the index is still down about 16 percent this year. The results argue that these companies are adapting to AI rather than being replaced by it. One week of buying does not settle that argument, but it does reopen it.