What’s Hot in Stock Market? Signs of Giants Waking up!

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Short-term momentum improving for Nifty IT, though sector heavyweights like TCS and Infosys continue to struggle

By S JHA

MUMBAI, August 26, 2025 — After months of underperformance, the Nifty IT index staged a sharp rebound, climbing 2.7% to 36,406, driven by hopes of a potential US Federal Reserve rate cut that could improve global liquidity and boost foreign inflows into Indian equities.

Market mentor Amit Seth highlighted that the index is “in short-term reversal mode,” noting that it crossed key moving averages — 10-day, 20-day, and now the 50-day exponential average (DEMA). He posted an alert message on his Telegram channel after frontline IT stocks sustained gains through the session on Monday.

According to analytics platform StockEdge, the rally was broad-based, with 90–100% of IT stocks trading above their 20-day SMA, signaling strong short-term recovery. However, only 10–20% of IT stocks are above their 50, 100, and 200-day SMAs, indicating the sector’s medium- and long-term weakness remains intact.

Year-to-date, Nifty IT has slipped nearly 14%, making it the worst-performing sector of 2025. Major firms like TCS, Infosys, HCL Tech, and Wipro are trading far below their 52-week highs amid weak earnings, margin pressures, and cautious client spending, with US tariffs and geopolitical uncertainties adding to the headwinds.

Market voices remain divided. Jagadeesh Chowdary questioned whether it is the right time to accumulate IT Bees systematically, while Sandeep Kulkarni noted that the Nifty IT/Nasdaq ratio hints at a possible bottom. Vishal Vardhan added that after four years of zero returns, the sector could enter a new growth cycle, with muted gains in the near term but strong prospects over the next 2–4 years.

The consensus: Nifty IT is waking up, but the rally’s sustainability depends on whether more stocks can break above longer-term moving averages. Analysts assert that the street is witnessing rotation, with a clear preference for auto, cement, chemical, and pharmaceutical stocks. In contrast, the IT stocks have been battered in recent months.

The IT behemoth TCS is trading at ₹ 3142 after the close of Monday. The peak of the stock was seen in September last year when shares of TCS hit the prices over ₹4500.

Similar price crash can be seen in other frontline IT stocks such as Infosys, HCL Technologies, tech Mahindra, and Wipro. The midcap space also mirrors their bluechip peersamong IT stocks. The likes of Persistent Systems, KPIT Technologies, Neogen Software, and many others are trading at heavy discounts against their peaks of last year.

(Disclaimer: This article makes n o recommendation for buy or sell of shares of any company)