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Informist, Friday, Nov. 21, 2025

 

MUMBAI – Analysts remain divided on the direction of domestic information technology stocks in the coming week. Some expect sentiment around IT stocks to remain negative, mirroring global peers, which have been on a selling spree amid concerns about the lofty valuations of artificial intelligence stocks and fading hopes of an interest rate cut by the US Federal Reserve at its December meeting. While others see upside potential for the Nifty IT index in the coming week, after its recent losses. 

 

Adding to the negative sentiment, growth visibility for the domestic IT sector in FY26 remains hazy, despite the slightly better earnings and strong deal wins in the September quarter. The topline growth of the sector in the next two quarters is "looking not so good" as IT spending remains weak amid the challenging macro environment, Ambrish Shah, assistant vice president of research at Systematix Institutional Research, said. The second half of the financial year would also see challenges relating to furloughs, he added. 

 

However, some technical analysts expect the Nifty IT index to gain more next week. Ashish Sherigar, a technical analyst at NVS Brokerage, remains bullish on the sector and recommends 'buy on dip' until the index breaches the 36100 levels. "(Nifty IT) already near resistance of 37050, break of this will take it to 38050," Sherigar said. Some analysts also expect the sectoral index to climb to 41000 points in the near term. 

 

The Nifty IT index gained 1.6% over this week, outpacing the 0.6% and 0.8% weekly gains in the Nifty 50 and Sensex. Barring Mphasis and Coforge, all other constituents of the IT index gained over the week. During the week, the sectoral index swung between gains and losses, closing higher in two of the five sessions.

This week, artificial intelligence industry bellwether Nvidia Corp. reported better-than-expected earnings for the quarter ended October, with its revenue jumping 62% to $57 billion, driven by demand for its chips used in AI data centres. The company has projected fourth-quarter revenue of about $65 billion, above the Street's $61 billion estimate. Nvidia Corp.'s earnings were seen as a cue to global demand for AI. "The Nvidia results, while positive, weren't enough to dispel doubts around whether valuations (of AI stocks) had gotten too rich," Bloomberg quoted Sameer Samana, global market strategist at Wells Fargo Investment Institute, as saying. 
 

Meanwhile, data released by the US Bureau of Labor Statistics Thursday showed that nonfarm payrolls grew by 119,000 jobs after a downwardly revised 4,000 drop in August. This was also higher than the 50,000 job additions projected by economists polled by Reuters. However, the unemployment rate unexpectedly rose to 4.4% from 4.3% in August. The Wall Street Journal had forecast it to remain flat at 4.3%. This has led to more uncertainty over whether the US Federal Reserve will cut interest rates in December. 

 

The release of the nonfarm payrolls figures was delayed by nearly seven weeks due to the 43-day US government shutdown. The jobs report typically comes out on the first Friday of each month. Now, the nonfarm payrolls for October will be released as part of the November employment report, which is slated for Dec. 16. Hence, no October or November payroll data will be available before the December meeting of the US Federal Reserve on Dec. 9-10. The chances of a rate cut by the central bank have now fallen to 35.1% from 44.4% last week, according to the CME Group's FedWatch measure of futures pricing.  

 

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

 

Company	Price	Week-on-week  change in %	Resistance	Support
COFORGE LTD	1797.50	(-)0.10	1871.60	1754.00
HCL TECHNOLOGIES LTD	1608.00	0.80	1656.70	1581.70
INFOSYS LTD	1545.00	2.80	1566.10	1515.70
L&T TECHNOLOGY SERVICES LTD	4265.40	4.40	4366.50	4201.50
LTIMINDTREE LTD	5926.00	2.00	6054.30	5845.30
MPHASIS LTD	2747.10	(-)0.90	2809.60	2682.20
PERSISTENT SYSTEMS LTD	6296.50	3.20	6417.20	6202.20
TATA CONSULTANCY SERVICES LTD	3150.60	1.40	3186.70	3117.10
TECH MAHINDRA LTD	1461.50	1.60	1485.80	1427.80
WIPRO LTD	244.49	0.10	248.80	241.50
NIFTY IT	36885.35	1.60	37249.10	36579.70
NIFTY 50	26068.15	0.60	26226.90	25972.90
BSE SENSEX	85231.92	0.80	85764.60	84921.50

 

End

 

Reported by Arya S. Biju

Edited by Saji George Titus

 

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