The IT pack is under pressure in today’s session, with selling visible across most frontline names. At this hour, the Nifty IT index has dropped 5%.

Almost all constituents are trading in the red, with only Oracle Financial Services Software (OFSS) managing to stay marginally flat.

The weakness is not limited to IT alone. The broader market is also seeing a sharp decline. At this hour, the benchmark indices are under significant pressure. The Sensex has slipped over 900 points, or about 1%, to trade below 76,800. Similarly, the Nifty has also plunged below the 24,000 mark, trading down nearly 200 points or 1% in the intraday trade.

What are the key triggers behind the sharp fall in IT stocks today? Here are 5 key reasons – 

Infosys drags sentiment after cautious outlook

One of the biggest triggers for today’s fall is the sharp decline in Infosys shares. The stock dropped nearly 6% to hit a 52-week and a 5-year low.

Infosys posted revenue of Rs 46,402 crore, up 13.4% year-on-year and 2% quarter-on-quarter. Net profit stood at Rs 8,501 crore, rising 20.9% YoY and 27.8% sequentially, while operating margin came in at 21%.

However, the concern is not the past performance but what lies ahead. The company’s FY27 revenue guidance of 1.5% to 3.5% has disappointed investors, pointing towards a slower demand environment. 

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Adding to that, large deal wins (Total Contract Value or TCV) dropped to $3.2 billion in Q4 from $4.8 billion in the previous quarter, indicating weaker deal momentum.

Broad-based sell-off across IT stocks

The weakness is not limited to Infosys alone. Other IT stocks have also seen sharp declines in today’s session.

Shares of LTM slipped around 5% after its recent earnings announcement. Similarly, Coforge, Mphasis, Tech Mahindra, TCS, and HCLTech declined over 6% each.

Wipro also traded lower, down around 2% in the intraday trade. 

The only exception in the pack was Oracle Financial Services Software, which managed to stay largely flat.

Weak demand environment weighs on outlook

Another key reason behind the fall is the continued weakness in global technology demand.

There are also growing concerns around reduced discretionary spending by clients. This is especially in the key markets like the US and Europe. 

Apart from this, companies are also facing pressure due to artificial intelligence (AI)-led pricing challenges. For instance, this is also impacting margins.

In addition, delays in client decision-making and slower ramp-up of large deals are affecting revenue visibility. 

Global uncertainties add to pressure

Global factors are also playing a role in today’s sell-off. Ongoing geopolitical tension, especially in West Asia, are adding to market uncertainty.

“Poor guidance from IT majors indicate that large cap IT stocks will continue to be weak despite the low valuations. Market trends indicate that investors are prepared to pay premium price to stocks which show growth and good long-term prospects. That’s why there is lot of activity in the broader market,” Dr. VK Vijayakumar, Chief Investment Strategist, Geojit Investments.

Tech sector: Technical outlook 

The ongoing decline in IT/tech stocks is largely a function of trend breakdown as per experts. “Firstly, most frontline IT stocks, including Infosys and TCS, have failed to sustain above their 50-day moving averages, which are now acting as dynamic resistance zones. This indicates a clear shift from bullish to bearish trend in the short to medium term. Secondly, price action across the IT index shows a consistent pattern of lower highs and lower lows, confirming a downtrend formation. Every pullback rally is getting sold into near resistance levels, suggesting supply dominance at higher levels, a key bearish technical characteristic,” said Aakash Shah Technical Research, at Choice Broking.

“The RSI for many tech stocks is hovering in the 40–50 range, indicating lack of bullish strength and inability to enter the positive momentum zone (>60). Additionally, MACD remains in negative crossover territory, signaling continued downside bias and absence of reversal confirmation. Another critical factor is relative underperformance vs benchmark indices like Nifty 50. The IT index is showing relative weakness, meaning even during broader market pullbacks or consolidations, tech stocks are declining faster — a classic sign of sectoral rotation away from IT,” he added.

Disclaimer: This report provides a general analysis of market movements and sectoral trends based on current exchange data and expert commentary. It does not constitute a specific recommendation to buy, sell, or hold any security, and should not be treated as a substitute for professional investment advice. Given the volatility of the equity markets and the risks associated with sector-specific trends, readers are encouraged to consult with a SEBI-registered financial advisor before making any investment decisions.

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