The Nifty IT index witnessed a sharp sell-off on June 30 as investors grew cautious of Indian technology stocks. The index touched a day low of 26,425.85, down sharply from the previous close of 27,038.50, before paring some losses to trade around 26,559.40, still down around 1.8%.
While the Nifty 50 index dropped about 0.27%, Nifty IT was one of the worst-performing sectoral indices on the NSE. Technical stocks have seen continued pressure on the IT index, which has shed nearly 4% for three sessions.
LTIMindtree was the biggest loser with its share price falling by 2.6% to trade near Rs 3,591, while Infosys lost nearly 2.2% to trade around Rs 1,014. The stock reached the intraday low of Rs. 1,005.50, falling below its prior 52-week low.
TCS declined about 2.1% to around Rs 2,054. Wipro fell over 2% and HCLTech declined 1.49%. The weakness was sector-wide and not just stock-specific, as other IT names like Persistent Systems, Coforge and Tech Mahindra also remained under pressure.
According to Reuters, today's weakness was driven by fresh concerns that US interest rates may remain high for an extended period, raising the risk that enterprises could postpone technology spending. Since North America contributes heavily to revenue for India's IT services industry, any slowdown in the region tends to weigh heavily on investor sentiment.
Meanwhile, the sector is under stress from Accenture's cautious outlook, which sparked concerns of dampening bookings, project decisions and discretionary spending. Investors are also keeping an eye out for any impact artificial intelligence has on traditional outsourcing and application maintenance jobs.
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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.
The index is still in the lagging quadrant of the Relative Rotation Graph, and MACD is down below zero and the signal line, Shah said.
The Nifty IT index has rallied by around 42% from the all-time high of 46,089 set in December 2024. The 26,100-26,200 range remains an important support level.
Anshul Jain, Head of Research at Lakshmishree, said the index is approaching a key long-term support near 26,189. A break below this level could signal a structural breakdown, while a move above 27,950-28,000 may be needed for a sustainable trend reversal.