The Nifty IT index fell more than 2% on Tuesday, 30 June, as investors turned risk-averse amid a combination of global technology weakness, uncertainty over AI-led disruption, and concerns about demand from key overseas markets.
Heavyweights LTIMindtree led the losses, falling 2.54%, followed by Infosys (-2.33%), TCS (-2.19%), Wipro (-2.07%) and HCLTech (-1.49%). Other constituents, including Persistent Systems and Coforge, also traded in the red, reflecting weak sentiment across the sector.
According to market experts, the decline in the Nifty IT index reflects a combination of global macroeconomic concerns and sector-specific challenges rather than any single trigger. Analysts note that Indian IT companies remain highly sensitive to global technology spending, particularly in the US, which accounts for the bulk of their revenue. Weakness in global technology stocks and continued caution over enterprise IT budgets have weighed on investor sentiment.
Experts also believe the sector is still feeling the impact of Accenture’s cautious outlook earlier this month, which highlighted softer bookings and delayed discretionary technology spending by clients. This has reinforced concerns about near-term revenue growth for Indian IT companies.
Another key overhang remains the rapid adoption of artificial intelligence (AI). While AI presents long-term opportunities, investors are awaiting clearer evidence that large Indian IT firms can successfully transition from traditional headcount-driven services to scalable, higher-margin AI-led offerings.
Technical Views
Sudeep Shah, Head of Technical and Derivatives Research at SBI Securities, believes the broader technical setup for the Nifty IT Index remains weak, with the index trading below its key moving averages on both the daily and weekly timeframes, indicating the primary trend remains under pressure.
According to Shah, the index continues to remain in the lagging quadrant of the Relative Rotation Graph (RRG), signalling weak relative strength and subdued momentum compared with the broader market. The MACD also remains below both the zero line and the signal line, suggesting the absence of meaningful bullish momentum.
Shah noted that derivatives data further reinforces the bearish outlook. Of the 12 Nifty IT constituents, eight have witnessed fresh short build-up, marked by rising open interest alongside falling prices, indicating increased bearish participation. LTIMindtree and Wipro have seen long unwinding, while only Coforge and TCS have recorded fresh long build-up. Among the constituents, Coforge stands out as the only stock exhibiting relative strength.
He pointed out that the Nifty IT Index has corrected nearly 42% from its all-time high of 46,089, set in December 2024, and is now trading near its April 2023 lows. The 26,100-26,200 zone remains a crucial long-term support area, having acted as a strong demand zone during multiple rebounds between June 2022 and April 2023. A decisive breach below this level could trigger another round of selling, Shah cautioned.
While intermittent pullbacks and short-covering rallies cannot be ruled out, Shah believes a sustainable trend reversal is unlikely unless the index decisively reclaims the 27,950-28,000 zone, which also coincides with the 20-day exponential moving average (EMA). Until then, he expects the broader technical bias to remain cautious, with any relief rallies likely to face selling pressure at higher levels.
Anshul Jain, Head of Research at Lakshmishree, believes the Nifty IT Index is approaching a crucial long-term support zone near 26,189, which marks its lowest level in nearly four years and could serve as an important technical demand area.
According to Jain, while a short-term relief rally from these levels cannot be ruled out, the broader technical structure remains weak. He noted that the index continues to form lower highs and exhibit persistent relative underperformance, while negative long-term momentum indicators point to continued institutional caution towards the sector.
Jain said any near-term rebound is likely to be corrective in nature unless the index manages to reclaim key resistance levels with strong market participation. On the downside, a decisive breach below the 26,189 support level could signal a structural breakdown and potentially pave the way for a prolonged decline over the coming months.
From a long-term investment perspective, Jain remains cautious on the sector, suggesting investors wait for a durable base to form and clearer signs of a trend reversal before turning constructive on IT stocks.
Disclaimer: This story is for educational purposes only. The views and recommendations above are those of individual analysts or broking companies, not Mint. We advise investors to check with certified experts before making any investment decisions.
About The Author
