Indian IT stocks hold firm through a global AI rout as oil and Hormuz keep investors on edge
While the Nasdaq suffered its worst day since April 2025 and Asian chip stocks fell 6 to 7 per cent, Indian benchmarks extended a seven-session winning streak on 6 November with Infosys, TCS and HCLTech in focus as a services-led alternative to AI hardware. Brent's swing back towards $100 on Hormuz disruption remains the sector's main macro risk.
Indian equities walked a narrow line on 6 November. The Nifty 50 edged up 0.17 per cent to around 24,578 and the Sensex climbed as much as 0.81 per cent to a high of 79,938, extending gains to a seventh straight session, a day after both indices had risen more than 2 per cent. Foreign inflows of about $1.6 billion in the previous session provided the cushion. The calm was notable because Wall Street had just recorded its steepest fall since April 2025, with the Nasdaq down 5.5 per cent as investors priced tougher AI policy after the Democrats took the Senate, and Japan's Nikkei and South Korea's Kospi fell six to seven per cent.
Indian IT was part of the reason. Infosys, TCS and HCLTech drew interest precisely because they sell enterprise services rather than AI hardware, making them a hedge against a chip-led sell-off. The Nifty IT index had touched a nine-month high earlier in the week on improving earnings sentiment, and Mphasis led gains on 6 November.
The Iran war sits underneath this picture as a persistent, second-order risk rather than a headline driver. Brent fell to around $93 on Thursday on hopes of a US–Iran agreement and then climbed back towards $100 on Friday as supply disruption through the Strait of Hormuz reasserted itself. For Indian IT, the direct exposure to West Asia is modest, with TCS deriving about 2.3 per cent of revenue from the Middle East and Africa, but it is not zero: LTIMindtree's West Asia and particularly Saudi exposure shaved an estimated 60 to 70 basis points off its second-quarter sequential growth, and analysts have warned since the spring that a prolonged conflict with elevated oil prices would slow discretionary spending by clients globally.
The indirect channels are larger. Roughly nine million Indians work in the Gulf, around a million returned home in the war's early months and remittances, which Al Jazeera estimated at $50 billion at risk, have been disrupted. Indian IT firms restricted travel to the region in March and Nasscom advised remote work for staff already there. Gulf clients paused new projects while awaiting the war's outcome, with S&P noting that technology was hit less hard than tourism, retail and logistics.
Why it matters
Indian IT's relative resilience in this week's rout reflects a market view that services demand, not hardware capex, is the safer side of the AI trade. That thesis holds only as long as the oil-driven inflation channel from the Iran war does not force clients in the US and Europe to cut discretionary technology budgets.
Indicops view
For Indian IT leaders the strategic opportunity is to convert the moment into AI-services revenue: clients cutting hardware spend still need to deploy models they have already bought, and that is implementation work. The risk management task is to stress-test Gulf delivery centres, staff travel and client payment terms against a renewed escalation. Government should watch the remittance and returning-worker data closely, since those households are also the domestic demand base for the services economy.
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