Nifty IT Index Suffers 2% Decline Amid Market Correction

The Nifty IT index faced a downturn, retreating by 2.11% on Thursday. This drop brought the index down to an intraday low of 43,087.25, significantly underperforming the broader market indices. This decline comes after the index experienced two consecutive sessions of record highs, pulling back from its recent peak of 44,330.60.

Pressure on the Sector

Leading IT companies were primarily responsible for this decline. Infosys saw a notable decrease of 3.17%, closing at Rs 1,863.55. Similarly, other key players like L&T Technology Services and Tech Mahindra also faced losses of around 3% and 2.84%, respectively. Other stocks within the sector, including TCS, Wipro, LTIMindtree, and Mphasis, exhibited declines ranging from 1% to 2%.

Profit Booking After Strong Rally

This retreat in the index reflects a phase of profit booking following a strong rally that had lifted the Nifty IT index by 3% over the past month. This performance was notably stronger compared to the broader Nifty50, which saw a decline of 1.16%. Analysts observed the emergence of bearish signals in the index, which may indicate a potential exhaustion of momentum among investors.

Impact of Global Tech Sell-off

An overnight sell-off in US tech stocks further compounded the difficulties for the Nifty IT index. Major companies like Nvidia, Dell, and HP recorded substantial declines, contributing to a 0.6% drop in the Nasdaq Composite.

Market Outlook

Technical indicators suggest that immediate support for the Nifty IT index is positioned at 42,600. Investors are advised to proceed with caution, focusing on booking profits during any rebounds and refraining from creating new positions until clearer trends materialize.

Nifty, IT, decline