Amid buoyancy in trade on Friday on the back of strong global cues, there is seen broad-based buying on the D-Street. Amid this market mood, Nifty IT index taking cues of a better-than-anticipated economic state of the world's most developed economy emerged as the top sectoral gainer. The IT sector extended its rally for the fifth consecutive day, rising over 6 per cent in 5 sessions at day's high, as softer inflation strengthened the case for a Federal Reserve rate cut in September. 

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At the last count, Nifty IT index was up by 2.27 per cent at 40,634.4, while at day's high it clocked levels of 40,659.4. The tech-heavy US Nasdaq index gained for the sixth consecutive session in a row and ended over 2 per cent higher.

So mirroring the positive sentiment, Indian IT stocks also zoomed and gained up to 7 per cent in intra-day trade. Of the 10 constituents, all the stocks traded in the green with gains between 1 to 7 per cent. Mphasis and L&T Technology Services led the list, with other stocks with gains of between 5-6 per cent.

Meanwhile, amid the resilience, stocks like TCS, Persistent Systems, HCL Technologies and Infosys traded close to their 52-week high price, while Tech Mahindra marked its fresh 52-week high of Rs 1,573.35 per share

In the last one year, despite the various headwinds, Nifty IT has surged over a decent over 31 per cent and within the pack Persistent Systems emerged as the outlier with gains of 97 per cent.

The Nifty IT pack demonstrated notable resilience today, reflecting the sector's ability to navigate global uncertainties. The IT sector benefits from a diversified client base, robust demand for digital transformation services, and cost management strategies, which have helped sustain growth despite macroeconomic challenges, said Suman Bannerjee, CIO, Hedonova.

Bannerjee added that the depreciating rupee has also supported margins, making Indian IT services more competitive globally.

An IANS report citing NSDL data said that the FPIs in the previous month invested an exorbitant Rs 11,763 crore in the Indian IT sector, the highest investment since April 2022 when a new sectoral classification was implemented in the market by NSDL.

Can one still buy into IT stocks?

Bannerjee noted tha while concerns around global recessionary trends persist, the strong deal pipeline and ongoing demand for cloud, AI, and cybersecurity services underpin the sector's performance. Investors might consider maintaining exposure to quality IT names with solid fundamentals.