Information technology stocks remained under pressure on July 1, extending their recent losing streak even as the broader market rallied. Investors continue to grapple with a subdued demand outlook, US Fed rate hike fears, cautious enterprise spending and mounting threat from artificial intelligence (AI) on traditional IT services.
At 12:01 pm, the Nifty IT index was down 0.58 percent, making it one of the few sectoral losers on the NSE, while the benchmark Nifty 50 gained 0.67 percent. The weakness marked the fourth consecutive session of declines for the IT index, following a nearly 2.7 percent drop in the previous session.
Selling was widespread across both large-cap and mid-cap IT stocks. Among Nifty constituents, Tech Mahindra fell nearly 3 percent and HCLTech declined about 1.5 percent, making them the top losers on the benchmark index. Infosys slipped 0.2 percent, while Coforge dropped 3.5 percent, Tata Elxsi lost 5.6 percent, KPIT Technologies tumbled 16 percent and Tata Technologies fell over 2 percent to feature among the top losers in the BSE Midcap index.
The latest weakness comes as investors continue to reassess growth prospects for the sector ahead of the June-quarter earnings season. Brokerage Emkay Research expects IT services companies to begin FY27 on a subdued note.