Market expert Harish has provided specific guidance for Tata Consultancy Services (TCS) investors amid ongoing sector volatility. During a market discussion on ET Now Swadesh, an investor from Assam named Nakul sought advice after purchasing 20 shares at ₹2,650 each and facing losses of more than ₹8,000. The expert highlighted significant volatility in the IT sector, noting that Nifty IT has witnessed sharp rallies over the last couple of weeks, followed by heavy declines. According to ET Now, profit booking has been visible whenever stocks rise, indicating cautious investor sentiment continues across the sector.
The Nifty IT index pared early gains to decline nearly 1% on Friday, June 5th, dragged by weakness in key IT heavyweights including Tata Consultancy Services, Infosys, HCLTechnologies, and Tech Mahindra after global tech giants snapped the AI-driven rally. According to NDTV Profit, shares of TCS, Infosys, HCLTech, and Tech Mahindra dropped by 1-2% each intraday during the session. The sell-off was triggered by Broadcom's fiscal second-quarter revenue missing estimates, which led investors to pare exposure to AI-linked stocks. As per Bloomberg, emerging-market equities notched their worst day in roughly three weeks as MSCI's benchmark stocks gauge fell 1.6%, with the information-technology subindex slumping as much as 3%. The disappointing report raised concerns that the significant rally in technology stocks may have gone too far, with market sentiment remaining slightly subdued following the results.
Asian tech stocks experienced significant declines as the slump in Wall Street's tech stars overnight spread into Asia. South Korea stocks plunged Friday, leading losses in the region with the Kospi index down nearly 4.11%, with heavyweights Samsung Electronics and SK Hynix dropping 6% and 8% respectively. The small-cap Kosdaq index fell over 2.41%, while Japan's benchmark Nikkei 225 fell around 1.1%. Hong Kong's Hang Seng index declined 0.98%, and Australia's S&P/ASX 200 index was 0.2% lower. The rotation was sparked by a sell-off in Broadcom that led investors to pare exposure to AI-linked stocks, with chipmaker Marvell Technology gaining 4.9% while Advanced Micro Devices, Micron Technology and Qualcomm fell between 2.6% and 7.7%. The VanEck Semiconductor ETF (SMH) lost more than 1%, indicating broad-based weakness across the semiconductor sector.
Market expert Harish provided a technical assessment of TCS's current position, noting that the stock's setup still appears weak with a possibility of further downside in coming days. According to ET Now, the stock is currently close to important support levels, and if these levels are breached, additional weakness may emerge. The expert added that the stock's technical structure does not yet indicate a decisive recovery, supporting his cautious stance. This technical analysis aligns with the broader sector volatility, where Nifty IT has been trading with significant volatility and previous trading sessions witnessed heavy declines.
Despite the technical weakness, experts offer contrasting advice based on investment horizons. For short-term investors, the recommendation is to remain cautious and consider exiting during any pullback rally, as fresh buying should be avoided from a short-term perspective. However, long-term investors can continue holding the stock, with the expert suggesting they may look at averaging their positions at lower levels if share prices decline further. This divergent advice reflects the current market uncertainty, where no major trend reversal yet in TCS despite the significant volatility witnessed across IT stocks. The expert's guidance comes as TCS has not yet shown signs of a strong trend reversal, maintaining the cautious outlook for near-term investors while offering a more constructive view for longer-term holders.
