New Delhi, June 20 -- As investor interest in technology stocks resurges, the Indian IT sector has staged a modest recovery in recent weeks. The Nifty IT index has risen nearly 4 percent over the past month, reflecting improving sentiment. However, global brokerage firms CLSA and Morgan Stanley remain cautious in their outlook, warning that weak discretionary spending and persistent global macroeconomic uncertainties could limit further gains.

Despite the recent uptick, the Nifty IT index has lagged behind the broader markets in 2025, declining nearly 11 percent year-to-date, compared to a 5 percent gain in the Nifty 50.

Both CLSA and Morgan Stanley believe the current environment is still challenging for the Indian IT sector. While the...