In a major relief for Indian IT companies and global markets, the Nifty IT index surged over 7% intraday on Monday following the announcement of a crucial US-China trade agreement. The trade war, which has been brewing for months, took a positive turn as both nations signed a de-escalation deal in Geneva, significantly reducing tariffs on each other’s goods.
What’s in the Deal?
USA has agreed to slash tariffs on Chinese imports from 145% to 30% for the next 90 days.
In response, China will cut tariffs on American goods from 125% to just 10%.
This development brings immediate relief to markets globally, especially for Indian IT companies, which derive a substantial portion of their revenue from the US market.
Why Indian IT Stocks Reacted So Strongly
According to industry estimates, 60-65% of the total revenue of Indian IT companies comes directly from clients in the United States. The prolonged trade tensions had raised alarms about a potential recession in the US, with Goldman Sachs and Morgan Stanley recently warning of a slowdown. A recession in the US could have severely impacted Indian IT firms by cutting down outsourcing and tech spending.
However, with fears of a full-scale trade war now abating, confidence has returned to the markets, resulting in a broad-based rally in IT stocks.
Major Gainers in the Nifty IT Rally
Here’s a breakdown of how key IT stocks performed in this stunning rally:
TCS rose 4.69% to ₹3,601.80
Infosys (INFY) surged 7.72% to ₹1,624.00
HCLTech gained 6.29% to ₹1,668.10
Wipro up 6.15% to ₹256.90
Coforge jumped 8.12% to ₹8,305.00
LTTS soared 7.74% to ₹4,429.90
Persistent Systems climbed 8.03% to ₹5,880.00
BSoft emerged as a top performer, rising 8.71% to ₹417.95
Saksoft posted a whopping 11.39% gain to ₹166.50
OnMobile also surged 10.19% to ₹49.74
Across the board, all major and mid-tier IT players ended the day deep in the green, with several recording 7–11% intraday gains.
Global Sentiment Boosted
It wasn’t just the Indian markets that responded positively. The Nasdaq Futures, tracking US tech stocks, also jumped over 4%, signaling optimism among global investors. The tech-heavy US index, closely tied to economic growth and trade flows
Expert Take
Analysts now believe that this trade deal could:
Delay any impending US recession.
Lead to increased IT spending by US corporates.
Reignite outsourcing and digital transformation projects that were on hold.
Disclaimer:
The information provided in this article is for informational purposes only and does not constitute financial, investment, or trading advice. Stock market investments are subject to market risks. Readers are advised to do their own research or consult a financial advisor before making any investment decisions.
