The Reason Behind Nifty IT’s 875-Point Jump: Why Institutional Funds Are Dumping Autos For Tech
The Indian technology sector witnessed a massive surge in morning trade on June 1, 2026. The benchmark Nifty IT index jumped 3.01% to hit 29,955.95 points, recovering sharply from early morning lows. Midcap star Persistent Systems led the rally with a near 5% gain, closely followed by heavyweight Infosys, as strong global demand and tech sector buying rejuvenated investor sentiment.
- Republic Business
- 2 min read
India's technology shares surged in early Monday trade, decoupling from widespread domestic market anxiety to push the sectoral index close to a major psychological milestone. The Nifty IT index opened at 29,349.20 and steadily climbed to an intraday high of 30,004.75 before stabilizing just under the critical line.
By mid-morning, the index traded at 29,955.95, up 875.80 points or 3.01%. This sharp move reflects broad-based sector rotation as institutional investors pull capital from domestic-heavy sectors to seek valuation comfort in technology exporters.
Midcaps Outpace Giants on Niche AI Demand
Midcap IT services provider Persistent Systems emerged as the top gainer on the index. The stock jumped 4.86% to trade at 5,447.00 INR. High-volume accumulation from domestic mutual funds powered the move as smaller, agile players rapidly bag niche enterprise artificial intelligence contracts.
Among the sector heavyweights, Infosys provided the maximum structural support to the index. Shares of the Bengaluru-based software exporter rose 4.06% to reach 1,208.00 INR.
Other key software exporters followed a similar upward trajectory. Mphasis gained 3.58% to trade at 2,352.70 INR, while Coforge and LTIMindtree advanced over 3.4% each. Tech Mahindra also witnessed strong buying traction, climbing 3.40% to reach 1,534.30 INR.
FII Flight to Safety Triggers Short Squeeze
Sudden tech rally is primarily a defensive play against macroeconomic headwinds. With Brent crude climbing to $93 per barrel and heavy foreign institutional investor (FII) outflows hitting banking and automotive counters, technology shares are acting as a safe haven.
Furthermore, a powerful short squeeze accelerated the morning's gains. Traders who had built short positions near Friday's close were forced to cover rapidly when the Nifty IT index breached its immediate resistance levels.
The buying momentum extended to the country's largest technology firms. Tata Consultancy Services (TCS) rose 1.91% to sit at 2,302.00 INR. Oracle Financial Services Software (OFSS) jumped 1.73% to cross the 10,136 INR mark, while HCL Technologies gained 1.71% to trade at 1,204.10 INR. Wipro also closed the morning session in the green, trading up 1.39% at 207.08 INR.
Published By : Shourya Jha
Published On: 1 June 2026 at 10:17 IST