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Informist, Saturday, Feb. 1, 2025

MUMBAI - Analysts believe that the near-term outlook for information technology stocks will be weak amid anticipation of lower returns from the market and recurring selling pressure from foreign investors. News flow related to the recently launched Chinese artificial intelligence model of startup DeepSeek and the US policies under President Donald Trump will be major cues for the sector in the near term. 

DeepSeek's new low-cost open source model R1, which showcases features on a par with global counterparts such as Nvidia and Google, had raised worries that there will be higher competition for IT players across the world, including those in India. Indian IT companies have been increasingly focusing on artificial intelligence projects. However, worries eased this week and analysts said such models will lead to similar launches and will help companies cut costs. 

Reports had said that Trump was considering new measures to restrict the export of artificial intelligence chips to China to ensure that advanced computing power remains in the US. Amid this chatter, Trump met Nvidia's Chief Executive Officer Jensen Huang to discuss about DeepSeek, which uses the company's H800 chips. While the US president did not share much detail about his meeting with the Nvidia CEO, the latter's spokesperson said both the parties discussed the importance of strengthening US technology and AI leadership, reports said. 

DeepSeek's entry has pulled down shares of IT majors this week. The Nifty IT index closed 1.5% lower at 42030.35 points, with all constituents in the red. The fall came after the government's projection of capital expenditure for the current and next financial year disappointed investors, denting hopes of a pickup in spending trends. The Indian stock market was open Saturday on account of the 2025-26 (Apr-Mar) Budget presentation by Finance Minister Nirmala Sitharaman. 

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Following are the resistance and support levels for the sector's key stocks for next week, as per calculations based on their prices on the National Stock Exchange:

End

Reported by Anjana Therese Antony
Edited by Akul Nishant Akhoury

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