IT stocks led by TCS, Infosys fall up to 7% as profit booking sets in after relief rally

Indian IT stocks, Infosys Ltd., TCS Ltd., Tech Mahindra Ltd., and broader market names like Persistent Systems Ltd. and Coforge Ltd. fell up to 7% on Wednesday, June 3, after a strong upmove seen over the last two trading sessions.

Shares of TCS are the top losers on the Nifty IT index, down over 7%, while those of Persistent Systems, Coforge, LTM, Mphasis are down between 3% to 5%.

Shares of Infosys, HCLTech and Tech Mahindra are also trading with losses of 2% to 3%.

Signs Of Caution?

After an 11% surge in the last four trading sessions, in which three of them resulted in gains, the US-listed shares of Infosys (ADR) fell 2.5% on Tuesday.

The ADRs of Wipro saw a bigger fall, declining over 8%. The fall came after a 25% surge in eight trading sessions, of which, the ADR ended higher in six of them.

Surge In Indian IT

The Nifty IT index gained over 4% on Tuesday, with every constituent of the index closing the session higher.

Infosys gained over 5%, marking the biggest single-day gain since May 2025. It also was the most traded Nifty 500 stock on Tuesday.

Over 2 crore shares of Infosys were marked for delivery, which is more than 3.5 times than its 20-day average. Despite this recovery, the stock is still down 22% in 2026.

TCS gained over 6% on Tuesday, marking their biggest single-day gain since July 2024. Tuesday was also the fourth instance in the last three months where over one crore shares were traded on the stock.

Over 52% of the total shares traded on TCS were marked for delivery on Tuesday. Despite the recovery, India's largest IT services company is still down 24% for the year so far.

At the end of Tuesday's session, the Relative Strength Index (RSI) of the Nifty IT index stood at 66.5, which is close to "overbought" territories. An RSI reading above 70 means the stock or sector is "overbought."

CLSA Sees More Upside

CLSA's Laurence Balanco spoke to CNBC-TV18 on Tuesday and said that there is a mean reversion trade playing out on the IT stocks and he remains optimistic on their prospects.

The CLSA chartist sees another 12.5% upside for the IT index from current levels.