Nifty IT hits fresh 52-week low on global tech jitters

The Nifty IT index fell more than 2% to a fresh 52-week low near 26,425 on Tuesday, 30 June, as persistent US inflation, uncertainty over Federal Reserve policy, and weak global technology demand weighed on Indian IT stocks.

Selling was broad based across frontline IT names including Infosys, TCS, LTIMindtree, Wipro and HCLTech, with analysts highlighting a crucial long-term support zone around 26,100-26,200 that could define the sector’s near-term trajectory.

Market overview

Index	30 Jun Close (approx.)	Move & % Change	Comments
Nifty IT	26,425	approx. -550 pts (-2%+)	Hit fresh 52-week low, near April 2023 levels.

Note: figures are approximate; final exchange data not available at time of publication.

• Nifty IT has corrected nearly 42% from all-time high of 46,089 (Dec 2024).
• Index now trades close to lows seen in April 2023, signalling prolonged underperformance.
• Persistent US inflation above 2% target has kept Fed policy expectations volatile.
• Traders price about 64% probability of a September Fed cut, per CME FedWatch Tool.
• Earlier hawkish Fed tone raised risk of rates staying higher for longer.
• Higher US rates and inflation seen curbing discretionary tech spending by clients.

Key movers

Top Gainers	Sector	Notable Factor
None	IT	All major constituents traded weak; no notable gainers reported.

Top Losers	Sector	Notable Factor
LTIMindtree	IT services	Fell around 2.5-3%, led index losses, fresh short build-up.
Infosys	IT services	Declined over 2%, sensitive to US tech budgets.
TCS	IT services	Dropped over 2%, fresh long build-up despite index weakness.
Wipro	IT services	Down about 2%, saw long unwinding in derivatives.
HCLTech	IT services	Slip around 1.5-2%, part of broad sector selloff.
Mphasis	IT services	Traded with marginal losses amid weak sentiment.
Tech Mahindra	IT services	In the red, demand concerns from overseas clients.
Coforge	IT services	Mild decline, only constituent showing relative strength.
Persistent Systems	IT services	Traded lower, reflecting sector-wide caution.

• Eight of 12 Nifty IT constituents saw fresh short build-up in futures.
• LTIMindtree and Wipro recorded long unwinding, indicating profit-taking and exit of longs.
• Only Coforge and TCS saw fresh long positions despite index weakness.
• Coforge highlighted as the sole stock showing relative strength versus peers.

Sectoral action and demand concerns

Sector/Index	Direction (approx.)	Key Drivers
Nifty IT	down 2%+	Global tech weakness, cautious enterprise IT budgets, AI disruption worries.

Note: figures are approximate; final exchange data not available at time of publication.

• Indian IT firms derive bulk of revenue from North America, especially the US.
• Weak global technology stocks have reinforced caution on sector earnings.
• Enterprises remain wary on discretionary IT consulting and digital transformation spends.
• Accenture’s softer outlook earlier highlighted delayed discretionary tech spending.
• Investors fear near-term revenue growth pressure despite AI and cybersecurity investments.
• Rapid AI adoption seen as both opportunity and execution risk for Indian IT majors.
• Market awaits proof of transition to scalable, higher-margin AI-led offerings.

Technical outlook

• Nifty IT trades below key moving averages on daily and weekly charts.
• Primary trend remains under pressure, with index in lagging quadrant on RRG.
• MACD stays below zero and signal lines, indicating lack of bullish momentum.
• Long-term support zone identified at 26,100-26,200, near 26,189 multi-year low.
• This zone earlier acted as strong demand area between June 2022 and April 2023.
• A decisive breach below 26,189 could signal structural breakdown and prolonged decline.
• Sustainable reversal seen unlikely unless index reclaims 27,950-28,000 zone.
• The 27,950-28,000 band aligns with the 20-day exponential moving average.
• Any near-term rebound expected to be corrective, facing selling at higher levels.
• Negative long-term momentum indicators point to continued institutional caution.

• “The broader technical setup for the Nifty IT Index remains weak, with the index trading below its key moving averages”

— Sudeep Shah, Head of Technical and Derivatives Research, SBI Securities.

• “A decisive breach below the 26,189 support level could signal a structural breakdown and potentially pave the way for a prolonged decline”

— Anshul Jain, Head of Research, Lakshmishree.

Global and macro cues

Market/Asset	Movement	Notes
US Fed policy	Rates unchanged	More policymakers see potential hike amid elevated inflation.
US inflation	Above 2% target	Fed cites sectoral supply shocks, including energy.

• Fed’s June meeting under Chairman Kevin Warsh kept rates steady but flagged inflation risks.
• Committee noted inflation is elevated relative to its 2% goal.
• Supply shocks in sectors including energy cited as drivers of price increases.
• Higher-for-longer rate narrative earlier this month hurt rate-sensitive IT stocks.
• Risk-averse stance among investors has intensified volatility in Indian IT this year.

Earnings season watch

• TCS will announce April-June FY27 results on 9 July, starting IT Q1 earnings.
• Management commentary expected to be more critical than headline numbers this season.
• Investors will track guidance on discretionary spending, AI transition, and US demand.

• “The management commentary of the IT companies will be more important than the results themselves this season”

— VK Vijayakumar, Chief Investment Strategist, Geojit Investments.

FAQ

Q: Why did the Nifty IT index hit a 52-week low?

• Combination of persistent US inflation, uncertain Fed rate trajectory, weak global tech stocks, and cautious enterprise IT budgets.

Q: What are the key technical levels for Nifty IT now?

• Support seen around 26,100-26,200 near 26,189 multi-year low; resistance near 27,950-28,000 and 20-day EMA.

Q: How does US Federal Reserve policy affect Indian IT stocks?

• Higher US rates and inflation can curb discretionary tech spending by US clients, directly impacting revenue for Indian IT exporters.

Frequently Asked Questions

Why did the Nifty IT index hit a 52-week low?

The Nifty IT index fell over 2% to a fresh 52-week low as persistent US inflation, uncertainty over Federal Reserve policy, weakness in global technology stocks, and cautious enterprise IT budgets weighed on sentiment and raised concerns about near-term revenue growth for Indian IT exporters.

What are the key technical levels for Nifty IT now?

Analysts highlight a crucial long-term support zone around 26,100-26,200, near the 26,189 multi-year low. A decisive breach below this could signal a structural breakdown, while a sustainable trend reversal is seen unlikely unless the index reclaims the 27,950-28,000 resistance band, which aligns with the 20-day exponential moving average.

How does US Federal Reserve policy affect Indian IT stocks?

Indian IT companies derive a large share of revenue from the US. Higher-for-longer interest rates and elevated inflation can dampen discretionary technology spending by US clients, particularly on consulting and digital transformation projects, which in turn pressures earnings expectations and valuations for Indian IT stocks.