Information technology (IT) stocks witnessed sharp selling pressure in Wednesday's trade, halting their recent recovery rally. Shares of Tata Consultancy Services Ltd (TCS) led the decline, falling 8.76 per cent. Infosys Ltd dropped 4.11 per cent, while Coforge Ltd slipped 6.19 per cent.

Among other major IT names, LTM Ltd (formerly known as LTIMindtree) tumbled 7.54 per cent and Persistent Systems Ltd cracked 5.85 per cent. Tech Mahindra Ltd, HCL Technologies Ltd, Wipro Ltd, Mphasis Ltd and Oracle Financial Services Software Ltd declined 6.08 per cent, 4.82 per cent, 3.20 per cent, 3.78 per cent and 3.40 per cent, respectively.

The weakness was reflected in the broader IT pack, with Nifty IT plunging 5.65 per cent in afternoon trade. The decline came a day after the sectoral index had surged more than 4 per cent, registering its biggest single-day gain of the year.

Despite the sharp correction, market experts remain constructive on the sector from a medium- to long-term perspective.

Sharad Avasthi, Head of Research (PCG) at SMIFS, noted, "The valuations of IT companies are attractive at current levels. We are bullish on the sector, and it is a good contra bet to have. There could be short-term hiccups, but large-cap names such as TCS and Infosys, along with players like Cyient, Hexaware Technologies and Coforge, could be added. At these valuations, I don't think investors should be unnerved about buying into the sector."

On the technical front, Ravi Singh, Chief Research Officer at Master Capital Services, said the IT sector continues to maintain a positive structure with buying support emerging on declines.

"Going forward, US economic data, interest rate expectations, and management commentary on client spending will remain important factors to watch for the sector's next move," Singh stated.

Jatin Gedia, Vice-President – Technical Research at Teji Mandi, expects the Nifty IT index to maintain a positive bias and sees it moving towards 32,300–32,500 levels in the short term.

"The 29,700–29,500 zone is likely to act as a support area for the index," he added.