Infosys, TCS, IT stocks extend rally for second day; Top CLSA chartists sees further upside

India's beaten down Information Technology stocks surged for the second consecutive day on Tuesday, June 2, with the Nifty IT index rising nearly 4%.

Infosys is the top gainer on the Nifty IT index with gains of over 5.5%. This is the biggest single-day gain for the stock since May 19 this year.

Infosys is closely followed by TCS, with gains of another 5% as well, marking their biggest single-day gain since June 2025.

Shares of Coforge, Mphasis, HCLTech, are trading with gains between 4% to 5%. Other non-index names, such as Sonata Software and Birlasoft are also seeing gains between 7% to 8%. All Nifty IT stocks are trading with gains. This is the biggest single-day gain for the IT index this year so far.

IT Stocks Have More Room To Run

In an interaction with CNBC-TV18 on Tuesday, CLSA chartist Laurence Balanco said that the IT stocks are witnessing a mean reversion and that there is further upside likely for these stocks.

"A base case on the Nifty IT is that we have got a mean reversion trade playing out. We did get slowing downside some momentum into the May lows, and if you just look at a mean reversion trade back to the 200 day, we still have another 12.5% upside for that rebound trade," he said.

Nifty IT's surge on Monday was also triggered by CLSA's optimism on the sector in its recent note

'How Much SaaSpocalypse is Real'.

The brokerage said the latest quarterly results of the tech companies showed that AI is not negatively impacting the software as a service (SaaS) demand yet.

Despite this recovery, shares of Infosys, TCS, HCLTech and Wipro are still down over 20% for the year. while those of Tech Mahindra have nearly erased all their losses for the year to turn positive.

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