Nifty IT slips 4%; Persistent, Mphasis plunge 5%; why are tech stocks down?

Technology stocks witnessed some profit-taking on Friday following a 19% rally in the Nifty IT index this July.

Information technology (IT) shares price movement

 

Shares of information technology (IT) companies were under pressure with the Nifty IT index falling 4 per cent to 30,034 on the National Stock Exchange (NSE) in Friday’s intra-day deals on profit-booking after a sharp surge in artificial intelligence (AI) and semiconductor stocks.

 

As of July 30, 2026, the Nifty IT index rallied 19 per cent.

 

Mphasis and Persistent Systems were down 5 per cent each, while Tata Consultancy Services (TCS), Infosys, Tech Mahindra, Wipro, LTM, HCL Technologies and Coforge were down 4 per cent in intra-day deals on the NSE.

 

Of these stocks, TCS, HCL Technologies, Tech Mahindra, LTM, Persistent Systems surged in the range of 19 per cent to 27 per cent in July, till Thursday.

 

At 09:47 AM, the Nifty IT index was the top sectoral loser, down 2 per cent, compared to a 0.13 per cent rise in the Nifty 50.

 

Why are IT stocks under pressure?

 

Wall Street staged a strong rebound after robust earnings from Microsoft fuelled optimism around AI-led technology spending, lifting the NASDAQ by 2.8 per cent, while the S&P 500 and Dow Jones posted healthy gains, said Rajesh Palviya, Head of Research, Axis Direct.

 

“A significant feature of recent stock market trends in countries like the US and South Korea has been the unusually huge volatility in stock price movements. Tech stocks are witnessing huge volatility in response to quarterly results, expectations and unprecedented speculative trading. In South Korea, particularly, volatility is excessive,” said Dr. VK Vijayakumar, Chief Investment Strategist, Geojit Investments Limited.

 

“Two stocks in Kospi - Samsung and SK Hynix - which account for 52 per cent of Kospi’s market capitalisation have been moving up and down sharply. In early trade this morning Kospi was up 16 per cent driven by 25 per cent spike in Samsung and 21 per cent spike in SK Hynix,” added Dr. VK Vijayakumar.

 

Meanwhile, stronger-than-expected guidance from Microsoft reignited investor optimism toward technology stocks, fuelling renewed buying across the sector and providing a supportive backdrop for global equities. While the recovery in global technology stocks is expected to lend near-term support to Indian equities, investors are likely to remain watchful of geopolitical developments and their potential impact on energy prices and overall market sentiment, said Ponmudi R, CEO of Enrich Money, a SEBI-registered online trading and wealth-tech firm.

 

The IT industry is undergoing a structural shift toward nonlinear, outcome-oriented delivery models, where growth is increasingly driven by platforms, intellectual property and AI-enabled services rather than linear headcount expansion. ER&D services are being reshaped by AI-led product engineering and software-defined capabilities, while the integration of AI into physical environments is further expanding the scope of technology services into industrial and operational domains, HCL Technologies said in its FY26 annual report on July 20, 2026.

 

At the same time, scaling AI adoption introduces new considerations, including infrastructure constraints, data governance, regulatory requirements and the need for trust, transparency and auditability in AI-driven processes. As a result, enterprise clients are increasingly seeking partners capable of delivering full-stack solutions across the AI lifecycle from data and platforms to deployment, orchestration and governance, HCL Technologies said.  ===================================================================  Disclaimer: View and outlook shared on the stock belong to the respective brokerages and are not endorsed by Business Standard. Readers discretion is advised.