According to reports from Business Standard, 8 out of 9 stocks that comprise the Nifty IT index are currently trading up to 26% below their respective 200-day moving averages (DMAs). The Nifty IT index, currently hovering around 26,700 levels, is 20% below its 200-DMA. In general, analysts use the 200-DMA indicator to determine the long-term trend for a stock or index, with stocks trading above this level considered directionally positive. From a technical standpoint, investors should monitor the 25,700 level as a crucial support for the index. The index briefly climbed above the previous session's close before turning lower, touching an intraday high of 27,502.60 and a low of 27,289.10, before trading at 27,340.90, down 0.36% during the session.
As reported by Business Standard, TCS is trading 26.4% below its 200-DMA, followed by Infosys (down 24%), Wipro (22.8%), and HCL Technologies (21.5%). The only positive performer in the IT pack is Oracle Financial Services Software (OFSS), which has rallied over 49% thus far in 2026 and trades 38% higher compared to its 200-DMA of ₹8,096. Among the major IT stocks, Infosys, TCS, HCL Technologies and Wipro are down in the range of 30-36% calendar year till date despite Thursday's up move. In Monday's trading session, Zensar Technologies declined 5.93%, making it the biggest loser, while Sonata Software fell 2.10% and KPIT Technologies dropped 1.58%. Other notable decliners included Newgen Software Technologies, Birlasoft, Tata Consultancy Services, Wipro, Tata Elxsi, Happiest Minds Technologies, Infosys, Tech Mahindra and HCL Technologies. On the positive side, Coforge was the top gainer, rising 1.11%, followed by Persistent Systems, up 0.53%, while Oracle Financial Services Software, Latent View Analytics and Hexaware Tech also traded in positive territory.
According to Business Standard, TCS' Q1-FY27 results scheduled for announcement on July 9 remain a critical catalyst for the IT sector. Nandish Shah from HDFC Securities expects the index to remain strong above the 25,700 level, with potential for a positive surprise to take it to 28,000 mark over the next few weeks. However, any disappointment could see the index slip to 23,850 to 24,000 levels, down around 10% from current levels. Ajit Mishra from Religare Broking maintains a cautious stance, noting that Thursday's recovery was a technical pullback as most stocks were oversold, with the overall trend remaining negative. The recent recovery in the IT index had been supported by expectations of quarterly earnings, easing market volatility with India VIX at multi-month lows, and strength in the broader market. Monday's decline, however, interrupted that rebound as losses in heavyweight stocks offset gains in a handful of mid-cap technology companies.
As reported by Business Standard, analysts at Capital 360 One maintain an underweight stance on the sector and expect the next couple of years to remain challenging as the industry navigates through AI-led disruption. They have downgraded TCS and Infosys to 'hold' from 'buy' and prefer mid-and small-cap stocks like Coforge and xClerx Services. The brokerage notes that while new use case streams should emerge, they should be insufficient to offset the deflationary impact in the near-term. Futures and options data showed open interest changes across several IT stocks, with Infosys, Tata Consultancy Services, Wipro, HCL Technologies, Tech Mahindra, Coforge, Persistent Systems, Oracle Financial Services Software and LTIMindtree featuring in the derivatives activity as investors assess the outlook for the Q1 FY27 earnings season following the sector's recent correction.
