Indian information technology stocks advanced on October 15, with the Nifty IT index gaining around 2 percent and emerging as the best-performing sectoral index. The index reached its highest level in more than a month at 30,856.90, supported by strong quarterly results from major IT companies and improving sentiment following a correction in global artificial intelligence-linked stocks.

Infosys, Tata Consultancy Services and HCL Technologies gained around 3 percent each, while Tech Mahindra advanced approximately 3.5 percent ahead of its quarterly results. Wipro also traded higher. Oracle Financial Services Software was the only Nifty IT constituent trading lower during the session.

VK Vijayakumar, Chief Investment Strategist at Geojit Investments, said the correction in global AI stocks could be positive for Indian equity markets. Foreign institutional investors have been selling Indian equities while increasing exposure to AI-related stocks overseas. A reversal of this trend could potentially support foreign inflows into Indian markets.

Global technology stocks came under pressure after stronger-than-expected US inflation increased concerns about further monetary tightening by the Federal Reserve. US consumer price inflation rose from 3.4 percent in August to 3.7 percent in September, raising the possibility of another interest rate increase. The Nasdaq Composite declined 1.88 percent, while technology-heavy markets in South Korea and Japan also faced significant selling pressure.

The weakness in global AI-linked stocks has encouraged investors to reassess valuations and relative opportunities across technology markets. For Indian IT services companies, the correction in overseas technology stocks may improve their relative appeal, although the longer-term impact of artificial intelligence on traditional IT services remains an important consideration.

Domestic IT stocks also received support from quarterly earnings. Results from HCL Technologies and Tata Consultancy Services helped improve sentiment, while investors looked ahead to further earnings announcements from companies including Tech Mahindra and Wipro. Expectations of relatively resilient earnings from financial companies could also provide broader support to the Indian equity market.

Vijayakumar noted that any reversal in foreign investor flows would depend on favourable market conditions and could be influenced by other policy developments, including the possibility of changes to long-term capital gains taxation in the upcoming Union Budget.

Despite the gains in Indian IT stocks, global market uncertainty remains elevated. Higher US inflation, expectations of tighter monetary policy and volatility in AI-linked shares could continue to influence investor sentiment. The sustainability of the Indian IT rally will depend on corporate earnings, growth prospects and whether foreign investors begin redirecting capital towards Indian equities.