Why are IT stocks outperforming

The industry index has certainly outperformed the broader market in the past month or so. The Nifty IT Index is up by about 13% in the past 30 days while the Nifty is up by about 5%

The Infotech industry faces headwinds but it also has some factors running in its favour at the moment. One issue is that the dollar has lost a lot of ground over the past year. Indian information technology (IT) companies derive the bulk of their revenues from the US. The weaker the dollar, the less that income translates to, in rupee terms. Also, given that the rupee has gained significantly versus dollar, the Indian IT firms could lose their competitiveness to some degree.

That's one problem. The second problem is that there have been continuous fears about the loss of H1B visa