IT Stocks Rout! Rs 1.5 lakh crore mcap eroded as Nifty IT plunges 12% from June high - Buy, hold or exit?

The Nifty IT index remained under heavy selling pressure on Thursday, extending its recent decline and raising investor concerns about the information technology sector's outlook.

The Nifty IT index remained under pressure on June 11, falling 738.65 points, or 2.61 per cent, to 27,541.25 in early trade. Selling was seen across major IT stocks, with Wipro declining 1.12 per cent, TCS 1.43 per cent, Mphasis 2 per cent, Tech Mahindra 2.19 per cent, Coforge 2.25 per cent and LTIMindtree 2.39 per cent.

Infosys fell 2.72 per cent, while HCL Technologies dropped 3 per cent. Persistent Systems declined 3.25 per cent, and Oracle Financial Services Software was the worst performer among the index constituents, falling 3.45 per cent.

Based on current market capitalisation and one-week declines, Nifty IT constituents are estimated to have lost about Rs 1.54 lakh crore in market value over the past week.

The broad-based decline reflected continued weakness in the IT sector, with all major constituents trading in the red. Despite the sharp correction, market expert Anil Singhvi believes investors should be cautious about selling IT stocks at current levels and may instead consider a contrarian approach.

Sharp Correction After June High

The Nifty IT index has witnessed significant weakness since the beginning of June. From its recent peak of 31,290.95 on June 2, the index has slipped to 27,638.30, erasing nearly 12 per cent of its value in seven trading sessions.

The decline adds to the sector's longer-term underperformance. The index is down 5.62 per cent in one week, 5.71 per cent in one month, 6.74 per cent in three months, 27.41 per cent in six months and 27.55 per cent so far in 2026.

The sector remains far below its 52-week high of 40,301.40 and is trading close to its 52-week low of 27,078, touched on May 14.

Technical Trend Remains Weak

According to Singhvi, there is no doubt that the sector remains weak from a technical perspective. He said the index has been making lower highs and lower lows, which reflects persistent selling pressure.

"The trend is clearly weak. There is no debate about that," Singhvi said. However, he noted that the current levels are approaching a zone where the index had previously found support and staged a meaningful recovery.

March Recovery Offers Hope

Singhvi recalled that the Nifty IT index had recovered sharply after touching similar levels in March. At that time, the index had fallen near the 28,300 zone before witnessing a strong rebound.

The recovery eventually lifted the index above the 32,000 mark within about a month. He said the current correction has once again brought the sector close to those support levels, making it an important area for investors to watch. According to Singhvi, sharp corrections often create opportunities when sentiment becomes excessively negative.

AI Stocks Also Facing Pressure

One factor that could influence the sector's outlook is the recent weakness in artificial intelligence and semiconductor-related stocks globally.

Singhvi said investors had increasingly shifted their attention toward AI-linked businesses over the past year. However, those segments are now facing pressure as well. "Earlier, only IT was weak. Now AI-related stocks are also seeing weakness," he said.

He added that investors deploying fresh capital may start comparing valuations and opportunities between traditional IT companies and AI-focused businesses.

Is This a Buying Opportunity?

Despite the negative sentiment, Singhvi believes selling IT stocks after such a steep correction could be risky. "My view is that selling IT stocks at these levels is risky," he said.

He noted that the sector has already undergone a substantial correction and is trading close to major support levels. For investors willing to take a contrarian view, he said the risk-reward equation has started improving compared with the levels seen earlier this month.

Singhvi advised investors to remain selective and focus on quality stocks rather than making broad sector bets.

While he acknowledged that the trend remains weak and a reversal is not yet confirmed, he said the sharp fall has brought the sector to levels where investors may begin evaluating buying opportunities instead of rushing to exit.