IT stocks traded lower, weighed down by sharp selling across the board in the Indian stock market on Wednesday. The benchmark Nifty IT index declined as much as 2.63%, with all its constituents trading in deep red.
Infosys, Tata Consultancy Services (TCS), Tech Mahindra, Wipro, Persistent Systems, Coforge, Oracle Financial Services Software and others declined in the range of 2-3% each.
The fall in IT stocks came amid a broader weakness in the Indian stock market today, dragged by weak global cues, as rising crude oil prices and surging bond yields dented risk-appetite.
In the US, technology stocks declined overnight, leading the tech-heavy Nasdaq Composite ending 271.11 points, or 1.03%, lower at 26,099.77.
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All three Wall Street indices declined on Tuesday, amid a spike in crude oil prices and Treasury yields on fading hopes for a near-term solution to the US-Iran war.
Global bond yields spiked amid concerns over rising inflation and government debt levels. The benchmark US 10-year Treasury yield surged 3.8 bps to 4.796%, its highest level since 2023.
Technical Outlook
The Nifty IT index has been consolidating within the 31,955 – 30,034 range since the end of July. The index has largely oscillated between its 200-day and 100-day EMAs, while the flattening of key moving averages reflects a sideways bias, noted Sudeep Shah, Head of Technical and Derivatives Research at SBI Securities.
“This consolidation follows a sharp 20% rebound from the July 1 low of 25,699. In other words, the Nifty IT index saw a strong one-month recovery, followed by a month of consolidation, a pattern that can be viewed as a healthy pause after a sharp move,” said Shah.
According to him, a decisive breakout on either side of the 31,955 – 30,034 range is likely to provide the next directional cue for Nifty IT.
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