Tata Consultancy Services (TCS) shares have corrected sharply, falling nearly 44% from their peak and slipping to their lowest level in over five years. The decline reflects sustained pressure across the IT sector amid concerns over slowing global tech spending and uncertainty around US interest rates.
The stock has been under pressure as investors reassess growth visibility in large-cap IT names. Strong US economic data has pushed Treasury yields higher, reducing expectations of early Federal Reserve rate cuts — a key sentiment driver for export-oriented sectors like Indian IT.
Why TCS Is Under Pressure
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Slower discretionary spending in key global markets
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Margin concerns due to pricing pressure and AI-led disruption fears
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Stronger US macro data dampening rate cut hopes
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Sector-wide valuation reset in large-cap IT
Over the past two years, IT stocks have faced a gradual re-rating as growth expectations moderated. The recent selloff suggests that investors are rotating capital toward sectors with clearer earnings visibility, such as banking and capital goods.
Broader IT Impact
The weakness is not limited to TCS. Other frontline IT companies including Infosys and HCL Technologies have also seen significant corrections from their highs. Market participants say that while structural demand for digital transformation remains intact, near-term order pipelines appear cautious.
📉 Technical View: Breakdown Signals Caution
From a technical perspective, TCS has broken below key medium-term support zones, indicating sustained selling pressure. The stock is currently trading below its major moving averages, including the 50-day and 200-day averages — a sign of weakening trend structure.
Momentum indicators suggest:
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RSI remains in bearish territory, reflecting persistent downside bias
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Lower highs and lower lows on the weekly chart confirm a downtrend
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Any pullback toward previous support levels may now act as resistance
Traders will watch whether the stock stabilises near long-term demand zones. A decisive recovery above immediate resistance levels could trigger short covering, while failure to hold current levels may open room for further downside.
What Happens Next?
A sustained recovery would likely depend on:
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Clarity on US rate trajectory
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Improvement in global tech spending outlook
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Strong quarterly guidance from major IT firms
For now, sentiment remains cautious, with investors closely tracking macro signals, sector commentary and technical support levels.
