Chip Fears Hit Markets; Infosys, TCS Gain as IT Stocks Buck Trend

Indian equity markets opened flat on Tuesday, July 28, with the Nifty 50 at 23,971.25, up 37.55 points from the previous close of 23,995.95. The Sensex opened at 76,831.75 and traded at 76,956.53, up 120.75 points. The cautious start followed Monday's 228-point recovery that snapped a five-session losing streak.

Global semiconductor stocks sold off after the blockbuster debut of China's ChangXin Memory Technologies (CXMT) on the Shanghai Star Market. CXMT shares surged roughly 500%, valuing the DRAM chipmaker at $540 billion. The debut raised concerns that Chinese memory chips could reach customers like Apple sooner than expected.

Devarsh Vakil, Head of Prime Research at HDFC Securities, noted that on Wall Street, "Nvidia fell 5%, SanDisk plunged 11%, and the Philadelphia Semiconductor Index dropped 4.2%." South Korea's KOSPI plunged over 7%, with SK Hynix falling more than 10% and Samsung Electronics dropping over 8%. Japan's Nikkei 225 fell more than 3%.

Foreign institutional investors continued net selling of ₹1,688 crore on Monday, while domestic institutional investors remained net buyers at ₹2,329 crore, cushioning the broader market.

In a sharp divergence from global chip weakness, Indian IT majors were among the top gainers on the Nifty 50. TCS led the pack, trading at ₹2,365.20, up 3.03%, on volumes of 9,40,218 shares worth ₹22,095.50 lakh. Infosys rose 2.64% to ₹1,107.70, while Tech Mahindra gained 2.64% to ₹1,616.60. HCL Technologies advanced 1.86% to ₹1,320.00, and pharma major Cipla gained 1.67% to ₹1,432.90.

On the losing side, defence electronics firm BEL was the top loser, down 2.47% to ₹397.10 on volumes of 38,31,286 shares. Coal India fell 2.04% to ₹418.80. NTPC declined 0.87% to ₹347.75, Power Grid slipped 0.83% to ₹286.45, and Tata Motors fell 0.81% to ₹325.00.

Analysts broadly agree that 23,800 is the critical support to watch. Gaurav Udani, Founder of ThinCredBlu Securities, said "23,800–23,900 remains the immediate support range, while 24,100–24,200 will act as the key resistance zone." He added that a sustained move above resistance could improve sentiment and trigger fresh buying, while a break below support may invite renewed selling pressure.

Shrikant Chouhan, Head of Equity Research at Kotak Securities, said the pullback rally is likely to continue as long as the Nifty sustains above 23,800, with the 20-day SMA around 24,100–24,150 as the upside target. He advised traders to "use the ongoing pullback to reduce weak long positions in the 24,100–24,200 zone."

Sachin Gupta of Choice Broking noted that India VIX declined sharply by 9.76% to 12.66 on Monday, "highlighting easing volatility and improving investor confidence," with the index expected to trade in a 23,800–24,150 range.

Crude oil prices fell to $80.99 a barrel after the US and Iran paused military strikes, providing relief on India's import bill and inflation outlook. The Indian rupee appreciated sharply by 65 paise to close at 95.91 on Monday, emerging as Asia's top performer.

Dr. VK Vijayakumar, Chief Investment Strategist at Geojit Investments, pointed to several positives. "The sharp correction in Brent crude to $87 is a strong fundamental and sentiment positive for the market," he said, adding that credit growth in the economy is impressive, running at around 18%, and there is good volume growth in sectors like automobiles.

Ponmudi R, CEO of Enrich Money, cautioned that the improvement in geopolitical sentiment has been overshadowed by a sharp sell-off across Asian equity markets, led by technology stocks, keeping domestic sentiment subdued despite supportive macro factors.

Bank Nifty faces immediate resistance at 57,300–57,400, aligned with its 20-day EMA, with support at 57,000–56,800, coinciding with the 50-day EMA.

On NVDA, Nvidia's 5% drop on US markets pushed its Alpha Score to 74 (Moderate) on AlphaScala's proprietary metric, reflecting the broader chip rout.