The Sector That Fell 30% and Gained 16% in a Month | Can IT Keep Going?

!TCS $INFY The numbers are almost hard to believe. So far in July 2026, the Nifty IT index gained nearly 16 per cent, recovering more than 21 per cent from its 52-week low of 25,699.10 touched on July 1. The same index was down over 30 per cent from its 52-week high just five weeks before that low. What started as a relief rally on TCS's better-than-feared Q1 FY27 results has broadened into a full sector re-rating, supported by strong deal wins, improving AI revenue disclosures and a weaker rupee boosting export earnings in rupee terms. The three key reasons analysts are citing for the ongoing recovery: better-than-expected quarterly earnings from major IT companies, market participants increasingly betting that the US Federal Reserve could begin reducing interest rates later in 2026 — which supports technology stocks as future earnings become more valuable when discounted at lower rates — and the Indian rupee remaining relatively weak versus historical levels, creating a favourable environment for export-driven IT companies. The open question heading into Monday is straightforward: after a 16 per cent single-month gain, is there still room to run or is the easy money already made? The next major trigger for the rally will be whether Nifty IT can decisively break above the 31,800 to 32,000 resistance zone. Infosys results are due in the week of August 11 — a number that will either confirm or complicate the sector's recovery narrative.