IT stocks have witnessed a sharp fall from the February 3, 2026 peak amid fears that artificial intelligence (AI)-led growth will disrupt the traditional outsourcing model. Analysts believe that AI is reshaping the industry faster than revenue growth is catching up.
Global technology spending toward AI increased by 10-13 per cent, while Indian IT services growth slowed to around 3-4 per cent, said Kotak Securities in its report.
READ MORE In the last four months, HCL Technologies among the Nifty IT index was the top loser, down 36 per cent from its high of ₹1,780 in February to an intra-day low of ₹1,132 today (Monday). LTI Mindtree and TCS too slumped around 36 per cent each; while Infosys, Wipro and Persistent Systems crashed in the 25-32 per cent range on the NSE.
In comparison, the NSE Nifty IT index has also wiped-out almost one-third of its value, falling from its February 3 peak of 40,301 to a low of 28,418 in Monday’s trade. The Nifty 50, meanwhile, has declined 12.4 per cent in the same period.
Technical analysts at Angel One reckon that IT stocks such as HCL Technologies, Infosys and TCS continue to look fairly weak on charts, and may extend losses if they dip below the crucial support zone.
ALSO READ | Nifty IT index tanks 9% in 4 days; Wipro, TCS down up to 6%; here’s why Technical outlook on HCL Technologies, Infosys and TCS by Hitesh Rathi, Technical Analyst (Equity & Derivatives) at Angel One.
Infosys
Current Market Price: ₹1,195
Infosys recently broke below the crucial ₹1,250–₹1,235 support zone. The breakdown, however, was not accompanied by any meaningful downside follow-through, highlighting a notable lack of bearish momentum, notes Rathi. “The significance of the ₹1,250–₹1,235 zone is further reinforced by the fact that it coincides with the 50 per cent Fibonacci retracement of the stock’s rally from the 2020 lows,” explains the analyst. Going forward, Rathi cautions that a decisive breakdown below the recent swing low ₹1,100–₹1,090 zone could trigger a fresh bout of selling pressure and accelerate the prevailing downtrend. Until such a breakdown occurs, he expects the stock to remain range-bound. ALSO READ | Federal Bank, Chennai Petro, Zen top weekly stock picks by Axis Securities
TCS
Current Market Price: ₹2,170
Among the large-cap IT stocks, Rathi highlights that TCS has been one of the weaker performers in recent months, with the stock remaining firmly entrenched in a primary downtrend. “The ongoing weakness is reflected in the formation of a consistent lower-high, lower-low structure. The strength of the prevailing downtrend is evident from the stock’s ability to break below several key support levels,” he explains. That said the analyst from Angel One notes that TCS is currently approaching a crucial support zone in the ₹2,180–₹2,150 band, which coincides with the 78.6 per cent Fibonacci retracement of its rally from the 2020 lows. Given the significance of this level, some buying interest or a temporary relief rally cannot be ruled out, says Rathi. However, he cautions that a decisive breakdown below the support zone could trigger a fresh wave of selling pressure and open the door for a deeper retracement towards the 2020 breakout region.
HCL Technologies
Current Market Price: ₹1,157 Hitesh Rathi believes that HCL Technologies remains weak as it continues to trade within a broader primary downtrend, characterised by a sequence of lower highs and lower lows.
From a price structure perspective, the analyst notes that the stock has broken below the neckline of a bearish Head and Shoulders pattern and also trades below all major exponential moving averages. The stock earlier formed a Bullish Low Pole, highlighting the presence of strong demand in the ₹1,130–₹1,100 support zone. However, the recent formation of a High Pole near ₹1,240–₹1,250 region points to significant supply emerging at higher levels, said Rathi. “The coexistence of these formations suggests that the stock may witness a period of consolidation or sideways movement before the next directional move unfolds,” explains the analyst. In case of a decisive breakdown below ₹1,130–₹1,100 levels, it may witness a fresh bout of selling pressure, cautions Rathi. Analyst Disclaimer: I/We am/are a [SEBI Registered Research Analyst – INH000000164]. The views expressed are my personal views and not investment advice. I/my associates/relatives do not have any financial interest or hold positions in the stocks/derivatives/commodities being discussed. There are no conflicts of interest. However, some of our clients may have positions in them. Investment in securities market are subject to market risks. Past performance is not indicative of future results. Disclaimer: The views expressed by the brokerage/ analyst in this article are their own and not those of the website or its management. Business Standard advises users to check with certified experts before taking any investment decisions.
