Information Technology (IT) shares saw buying action in Wednesday's trade (July 2, 2025)- lending support to the headline indices in a tepid market. In early trade, the index zoomed to up to 1.77 per cent -logging the day's high of 39,519.50, while at around the time of writing this copy at around 11:45 am, the index erased most of its early losses and was up just over 0.22 per cent.

Out of the 10 constituents constituting the index, seven stocks traded in the green, while 3 traded in the red, with counters like Infosys, Wipro, TCS, LTIMindtree, Mphasis and Coforge leading the gains.

Mphasis turned out to be the top sectoral gainer, followed by other stocks including, Wipro, LTIMindtree, Infosys and TCS among others. Nonetheless, stocks like Oracle Financial Services (OFSS), HCL Tech and Persistent Systems traded with mild losses.

The index gained momentum amid the US President Donald Trump's comments on a trade deal between the US and India that he said will likely be finalised soon with "much lower tariffs".

Also, optimism around the upcoming earnings season that is to kickstart with IT bellwether -TCS is also driving sentiment.

Furthermore, Fed Chair Jerome Powell's commentary that the US central bank would  have already cut interest rates in 2025- had it been not for tariffs also boosted sentiment.

“We went on hold when we saw the size of the tariffs and where, and essentially all, all inflation forecasts for the United States went up materially as a consequence of the tariffs,” Powell said. “So we didn’t overreact it. In fact, we didn’t react at all," he added.

IT Q1FY26 earnings outlook

Prabhudas Lilladher expects weak revenue performance for IT companies for Q1 in an otherwise seasonally strong quarter. Although the intensity of tariff uncertainties has reduced to some extent, demand recovery in tariff-induced verticals continues to be weak with global enterprises remaining cautious and sensing near-term uncertainties, it added.

Nonetheless, the brokerage continues to remain positive on TCS, Infosys, Persistent Systems and Mphasis, which are either less sensitive to discretionary spending or have low exposure to tariff-sensitive verticals.