IT Shares on Track for Worst Monthly Performance Since 2008, Fueling Debate on Oversold Territory

Indian IT Sector Under Pressure

The Sensex and Nifty benchmark indices declined by more than 1 percent on Tuesday, primarily due to heavy selling in Information Technology (IT) shares. The decline was driven by concerns over artificial intelligence (AI)-led disruption and renewed trade-related uncertainties.

Nifty IT Index fell into a clear bearish phase in February 2026 after correcting nearly 21%. The index broke down from a Head and Shoulders pattern on the weekly chart, a classic signal of a structural trend reversal. This led to a decline below its crucial 10-month low of 30,918, confirming a weak broader trend.

Technical analysis suggests that the index has breached the 61.8% Fibonacci retracement level and witnessed a negative crossover of key moving averages, known as a ‘Death Cross’. This indicates a shift from a ‘buy on dips’ approach to a ‘sell on rise’ strategy. The technical structure points to further downside toward the 29,300–28,700 support zone.

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Market Outlook

According to Anand James, Chief Market Strategist at Geojit Investments Limited, the decline has weakened the near-term outlook. While oscillators had moved into oversold territory and some positive divergence was visible in recent sessions, Tuesday's decline has pushed the index below the February 13 reaction low of 31,422. Momentum indicators favor further slide, with support levels seen at 29,961, 28,800, and 27,200.

Performance Metrics

• Nifty IT Index declined over 9.4 percent in the past one week.
• The index has dropped over 21 percent in February 2026, marking its steepest monthly decline since the 2008 global financial crisis.
• The index has fallen more than 21.6 percent in the last one month.
• The index closed at 31,550.5 on Monday.

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