Major Indian information technology (IT) companies experienced significant stock market declines today, with shares of Tata Consultancy Services (TCS), Infosys, and HCL Technologies plummeting to their 52-week lows. The downturn swept across the entire IT sector, pushing key indices sharply lower amidst renewed investor concerns about the potential disruptive impact of artificial intelligence (AI).
The "bear attack" on Dalal Street saw the BSE IT index shed 3.67%, dropping by 1048 points to Rs 27,485, while the Nifty IT index crashed 3.73%, losing 1094 points to settle at 28,234. Beyond the three giants, other prominent IT firms such as Tech Mahindra and Wipro also featured among the day's top losers, with some stocks falling by as much as 4.44%.
AI Disruption Fears Drive Sell-Off
The intense selling pressure on IT stocks emerged a day after OpenAI announced plans for a new company, backed by over $4 billion, aimed at assisting organizations in building and deploying AI solutions. This development reignited fears among investors that advanced AI capabilities could significantly disrupt traditional IT services models, potentially eroding margins and demand for human-led solutions.
Company-Specific Impact
- Infosys: Shares hit a 52-week low of Rs 1123.10 during the session. The stock ultimately closed 3.09% lower at Rs 1140.35, with the firm's market capitalization standing at Rs 4.62 crore.
- TCS: The IT bellwether's shares also touched a 52-week low of Rs 2283.05. TCS ended the day 3.84% down at Rs 2300.65, with its market cap at Rs 8.32 lakh crore.
- HCL Technologies: HCL Tech recorded a yearly low of Rs 1142.65. The stock concluded the trading session 4.11% lower at Rs 1145.80.
Analyst Outlook on IT Majors
Market analysts offered their perspectives on the future trajectory of these major IT stocks following today's sharp declines:
HCL Technologies
Jigar S Patel from Anand Rathi noted that HCL Technologies finds support at Rs 1120, with resistance at Rs 1185. A breakthrough above Rs 1185 could pave the way for an upside towards Rs 1220, suggesting the stock might trade within the Rs 1120–Rs 1220 range in the short term.
Virat Jagad, Sr. Technical Research Analyst at Bonanza, highlighted that HCL Technologies is in a strong bearish trend, having broken multiple support zones and hitting a fresh 52-week low. He identified immediate support at Rs 1120, followed by a major long-term support near Rs 1080. Resistance levels are anticipated at Rs 1200–1220, then Rs 1260 and Rs 1335. Jagad advised caution for positional traders unless the stock reclaims and sustains above Rs 1260.
Tata Consultancy Services (TCS)
Patel indicated support for TCS at Rs 2240 and resistance at Rs 2415. A decisive move above Rs 2415 could lead to further gains towards Rs 2445, with the stock expected to trade between Rs 2240–Rs 2445 in the near term.
Jagad observed that TCS remains in a strong downtrend, trading below all key Exponential Moving Averages (EMAs) with a clear bearish alignment on the weekly chart. He stated that the recent breakdown below major support zones confirms the continuation of bearish sentiment. Immediate support is seen around the Rs 2,250–2,200 zone, while resistance is near Rs 2,450–2,500. Jagad warned that rallies might continue to face selling pressure unless the stock reclaims key moving averages.
Infosys
For Infosys, Patel set support at Rs 1100 and resistance at Rs 1195. A breakout above Rs 1195 could open the door for an upside towards Rs 1265, placing the short-term trading range between Rs 1100–Rs 1265.
Jagad remarked that Infosys is currently near a crucial long-term support zone around Rs 1,120–1,150 after a sharp correction. Despite the Relative Strength Index (RSI) nearing oversold territory, signaling potential exhaustion in selling, a reversal confirmation is still absent. He cautioned that a decisive breakdown below the current support could trigger further downside to Rs 1,050, while any pullbacks might face resistance near Rs 1,250–1,300. The broader trend is likely to remain cautious to negative until the stock forms a stable base and regains major resistance levels.