..... . VALI disclosures . .....: 29/07/26, IT index rose 3% on July 28, defying a wider Asian technology selloff driven by concerns about the heavy capital needs of the AI boom. Indian IT is seen as relatively insulated because it has few pure-play artificial intelligence companies.

Wednesday, July 29, 2026

29/07/26, IT index rose 3% on July 28, defying a wider Asian technology selloff driven by concerns about the heavy capital needs of the AI boom. Indian IT is seen as relatively insulated because it has few pure-play artificial intelligence companies.

The sub-index has risen 6% over two sessions after Jefferies upgraded the sector to "neutral" from "underweight".

The gains come ahead of the Fed's policy decision on Wednesday, when it is widely expected to keep interest rates unchanged.

"The retreat in the AI frenzy globally creates room for India's battered IT sector to find its footing," said Gaurav Kulshreshtha, chief investment officer at Nexedge Capital.

"However, fundamental headwinds remain for large-cap IT and global tech spends need to materially improve for any sustained recovery."

Is the worst over for the beaten down index and its constituents?

Amid a sharp sell-off across East Asian technology hubs driven by escalating fears over debt-fueled artificial intelligence (AI) capital expenditure and uncertain return-on-investment timelines, India's technology services sector has demonstrated remarkable resilience. While semiconductor giants and hardware suppliers across South Korea, Taiwan, and Japan faced heavy selling pressure, major Indian IT exporters led by Tata Consultancy Services, Infosys, and HCLTech. This divergence underscores a structural decoupling between hardware-centric AI speculation and service-oriented software implementation, said Mayank Jain, Market Analyst, Share.Market by PhonePe.

"The primary catalyst behind this insulation stems from Indian IT's minimal exposure to heavy capital expenditure. Unlike global chipmakers and hyperscalers bearing the multi-billion-dollar burden of AI data center buildouts, Indian IT firms operate on an asset-light, cash-generative services model. Having already undergone a multi-quarter valuation de-rating that wiped out substantial market capitalization, the Nifty IT index reached attractive risk-reward levels. Domestic and foreign institutional investors consequently executed a tactical rotation, treating Indian IT as a defensive value proxy while trimming exposure to high-multiple Asian hardware counters," added Jain.

Near-term momentum for Indian IT will ultimately depend on macro easing in the West, particularly the US Federal Reserve's rate path. With North American BFSI clients serving as the sector's primary growth engine, lower interest rates are required to release pent-up discretionary tech spending. Easing global inflation further stabilises client operating margins, laying the groundwork for budget expansion. Although immediate stock performance hinges on management commentary surrounding TCV deal execution, the sector's low capital intensity and cash generation have effectively set a firm floor under its valuations, the analyst further said.

Jain gave trading levels for those who want to trade in the index and four frontline IT stocks -- Tata Consultancy Services, Infosys, HCL Technologies and Tech Mahindra.

IT index

The Nifty IT Index registered a sharp upward move during the latest trading session, rising over 3.5% to close near the 30,500 mark. This gains momentum following a severe multi-month downturn where the index dropped from its peak around the 46,000 level down to a key support zone near 25,600. The strong single-day rally was backed by higher trading volume, indicating active buying and short-covering at lower levels.

From a technical standpoint, the index has successfully reclaimed its short-term moving averages, specifically the 20-day and 50-day Exponential Moving Averages (EMA), which currently hover around the 28,600 to 28,700 range. This dynamic area now acts as an immediate support floor for the market. However, the overall long-term trend remains cautious, as the index is still trading below its 200-day EMA, located near 31,800. Market observers view the 31,800 to 32,000 zone as a crucial hurdle that the index must cross to confirm a broader trend reversal. In the near term, price movement suggests strong recovery momentum, though ongoing volatility could see testing around previous support zones, said Jain

TCS

Technically, at Rs 2,407, TCS trades above its short-to-medium-term 20 DMA (Rs 2,295) and 50 DMA (Rs 2,250), pointing to an active short-term recovery, though it remains below its long-term 200 DMA (Rs 2,624).

The high value and quality metrics, coupled with robust dividend yields (4.8%), favour accumulation for patient, value-oriented investors, while technical momentum traders may seek a decisive breakout above the 200 DMA before expanding exposure, said the analyst.

Infosys

Technically, trading at Rs 1,112, Infosys exhibits a short-term bounce above its 20 DMA, but continues to trade below its 50 DMA and 200 DMA, reflecting a broader consolidated chart pattern.

Strong cash generation, a 4.3% dividend yield, and attractive valuation multiples present a solid defensive play, though upside moves may remain constrained until revenue guidance re-accelerates and leadership transition clears, said Jain.

HCL Technologies

On the charts, at Rs 1,338, HCL Tech maintains the strongest technical layout among large-caps—trading comfortably above its 20 DMA and 50 DMA as it tests overhead resistance near its 200 DMA.

Technically, with the stock maintaining a firm posture above its 20 DMA and 50 DMA, the current consolidation near the 200 DMA (Rs 1,338) represents a crucial pivot point. A volume-backed technical breakout above this 200 DMA hurdle could increase the chances of an upward movement, said Jain.

Tech Mahindra

From a price standpoint, at Rs 1,635, the stock sits above its 20 DMA and 50 DMA, with operational metrics gradually translating into price recovery below long-term 200 DMA hurdles.

Tech Mahindra presents a high-conviction turnaround story where internal efficiency measures are successfully driving operational alpha. Technically, the stock is building constructive momentum above its 20 DMA and 50 DMA at Rs 1,635. For investors focused on margin expansion and earnings acceleration, any minor pullbacks ahead of its 200 DMA (Rs 1,700 zone) offer a favourable risk-reward window to participate, the analyst said.

Report by J. Jagannath

Source:moneycontrol

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Trade Cycles

The four important features of Trade Cycle are (i) Recovery, (ii) Boom, (iii) Recession, and (iv) Depression!

The trades cycle or business cycle are cyclical fluctuations of an economy. A full trade cycle has got four phases: (i) Recovery, (ii) Boom, (iii) Recession, and (iv) depression. The upward phase of a trade cycle or prosperity is divided into two stages—recovery and boom, and the downward phase of a trade cycle is also divided into two stages—recession and depression.

Phases of Trade Cycle:

The phases of trade cycle are explained with a diagram:

(1) Recovery:

In the early period of recovery, entrepreneurs increase the level of investment which in turn increases employment and income. Employment increases purchasing power and this leads to an increase in demand for consumer goods.

As a result, demand for goods will press upon their supply and it shall, thereby, lead to a rise in prices. The demand for consumer’s goods shall encourage the demand for producer’s goods.

The rise in prices shall depend upon the gestation period of investment. The longer the period of investment, the higher shall be the price rise. The rise of prices shall bring about a change in the distribution of income. Rent, wages, interest do not rise in the same proportion as prices.

Consequently, the margin of profit improves. The wholesale prices rise more than retail prices. The prices of raw materials rise more than the prices of semi-finished goods and the prices of semi-finished goods use more than the prices of finished goods.

(2) Boom:

The rate of investment increases still further. Owing to the spread of a wave of optimism in business, the level of production increases and the boom gathers momentum. More investment is possible only through credit creation. During a period of boom, the economy surpasses the level of full employment and enters a stage of over full employment.

(3) Recession:

The orders for raw materials are reduced on the onset of a recession. The rate of investment in producers’ goods industries and housing construction declines. Liquidity preference rises in society and owing to a contraction of money supply, the prices falls. A wave of pessimism spreads in business and those markets which were sometime before sellers markets become buyer’s markets now.

(4) Depression:

The main feature of a depression is a general fall in economic activity. Production, employment and income decline. The prices fall and the main factor responsible for it is, a fall in the purchasing power.

The distribution of national income changes. As the costs are rigid in nature, the margin of profit declines. Machines are not used to their full capacity in factories, because effective demand is much less. The prices of finished goods fall less than the prices of raw materials.

✳Reality Tips to Traders

1)Trading in the stock market is a marathon. 2)Protecting your capital is key. (Learn to protect first) 3)Making 0 on the day is better than losing 50k 4)Losses happen; they are part of this business. 5)It’s not you vs. the market. It’s you VS you. 6)You are your biggest enemy; learn to be mentally disciplined. 7)Don’t follow the majority; follow the correct path. 8)Traders without a stop loss end up not being traders for long. 9)There is always another trade. 10)The big money is made waiting for the right set-ups. 11)Waiting for the right trade is the most powerful strategy. 12)It is better to cut a loss than to wait to be proven right. 13)Position sizing can make or break you. 14)Worry about the downside before you even think about the upside. 15)Don’t listen to headlines

..BANKING TERMINOLOGY

There are various types of Banks: PSU Banks, Private Banks, Co-operative/Regional Banks, Small Finance Banks and Foreign Banks. When you deposit money in a bank, let's say the bank gives you an interest rate of 4%. But when the bank lends out this money, they lend it out at say, 12%. The difference of 8% in the above scenario is effectively the profit of the bank! The loans that do not pay interest for 90 days are known as Non-performing Assets. Banks have to provide for such bad loans. Structure of a Bank Asset for a Bank: The asset portion of a bank's capital includes cash, government securities, and interest-earning loans (e.g., mortgages, letters of credit, and inter-bank loans). Liabilities for a Bank: The bank's main liabilities are its capital (including cash reserves and, often, subordinated debt) and deposits. The latter may be from domestic or foreign sources (corporations and firms, private individuals, other banks, and even governments). Banks are required to maintain Liquidity with the Reserve Bank of India: SLR (Statutory Liquidity Ratio): It is the money a bank needs to preserve in the form of cash, gold or government Bonds before providing credit customers. This limitation is added by RBI on banks to make funds available to customers on-demand at your earliest convenience. Banks are required to maintain SLR at 18%. CRR (Cash Reserve Ratio): Banks are required to hold a certain proportion of their deposits in the form of cash. Banks don’t hold these as cash with themselves, but deposit such amounts with RBI / currency chests. CRR rate is at 4.5% currently. Repo Rate: The rate at which the RBI lends short-term money to the banks. The RBI through its Monetary Policy committee changes the repo rate to balance growth and Inflation. Reverse Repo rate: The rate at which banks park their short-term excess liquidity with the RBI. Now let us understand various terminologies for Banks Net Interest Income (NII): This is the spread the bank makes on its lending. It is calculated as Interest Income – Interest Expended Net Interest Margin (NIM): This is the spread the bank makes on its lending. It is the earning which is left after deducting the cost paid to depositors from its yields on Loans. This is denoted in % terms. The formula is Yield on Loans – Cost of funds Capital Adequacy Ratio (CAR): The capital adequacy ratio (CAR) is a measure of a bank's available capital expressed as a percentage of a bank's risk-weighted credit exposures. Essentially, it is the Capital that is available to lend. Tier I Capital – In simple words this capital is freely available with the bank to lend out. Tier II Capital- This is the capital tied up somewhere and is less freely available to lend. In case of an adverse event, the bank can use this capital to lend. Under Basel III norms, a bank’s tier 1+tier 2 capital must be a minimum of 8% of its risk-weighted holdings. The minimum capital adequacy ratio, also including the capital conservation buffer, is 10.5%. Current Account Saving Account (CASA)- There is no interest paid on the Current Account and a small interest rate is paid on a savings account. The combination of both is called CASA which shows the liabilities of the bank on which it pays relatively less interest. Deposits: Bank deposits are a savings product that customers can use to hold an amount of money at a bank for a specified length of time. In return, the financial institution will pay the customer the relevant amount of interest, based on how much they choose to deposit and for how long. Now let us come to NPA. Gross NPA (GNPA): It is the total loans on which no payment has been paid for 90 days or more. GNPA % is usually shown in each Bank’s quarterly results. The percentage is basically the GNPA amount as a % of the total advances. Slippages: Slippages denote the fresh amount of loans that have turned bad in a year. The slippage ratio of a bank is calculated as Fresh accretion of NPAs during the year /Total standard assets at the beginning of the year multiplied by 100. Provisioning Coverage Ratio (PCR): This is the ratio of provisioning to GNPA and indicates the extent of funds a bank has kept aside to cover loan losses. For Instance, a company has GNPAs of Rs 100 and they have set aside 50 Rs, then the PCR is 50%. Net NPA (NNPA): The total figure left after deducting provisions made for bad loans from GNPA. (GNPA – Provisions+upgrades/writeoffs = NNPA) Special Mention Account (SMA) SMA-0 is a category in which stress with respect to the principal and interest has remained overdue for a period of 0 to 30 days. SMA-1 is a category in which stress with respect to the principal and interest has remained overdue for a period of 30-60 days. SMA-2 is a category in which stress with respect to the principal and interest has remained overdue for a period of 60-90 days

..... . VALI disclosures . .....

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Wednesday, July 29, 2026

29/07/26, IT index rose 3% on July 28, defying a wider Asian technology selloff driven by concerns about the heavy capital needs of the AI boom. Indian IT is seen as relatively insulated because it has few pure-play artificial intelligence companies.

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Today's

29/07/26, Johnson & Johnson

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