Indian IT stocks hope to catch a break after longest losing streak since February

Market Overview - Indian equities are expected to open positively after six consecutive days of losses, supported by gains in Asian markets and US equity futures [1] - The bond market may also benefit from the government's decision to cut long-tenor bond supply, with traders focused on the upcoming RBI interest rate decision [1] IT Sector - The IT sector is facing challenges, with an index of IT stocks declining for six straight sessions, the longest losing streak since February [2] - Accenture's disappointing commentary and the increase in H-1B visa fees have contributed to a tough demand environment, with analysts predicting a significant demand upswing may be at least a quarter or two away [2] - Analysts at Antique favor HCL Technologies, Coforge, and Mphasis as potential recovery plays in the sector [2] Bond Market - Fixed income traders are closely watching the RBI, with expectations of a 25 basis point rate cut that could lower the 10-year yield by up to 30 basis points [3] - A smaller 10 basis point rally is anticipated if the RBI adopts a dovish tone, but no action could lead to selling pressure [3] - Recent reductions in long-bond issuance have alleviated supply concerns, although most analysts expect the RBI to maintain current rates [3] State-Owned Banks - Analysts at Motilal Oswal see potential for a gradual rerating of state-owned banks due to stronger balance sheets and healthier asset quality [4] - Despite near-term earnings facing margin pressure, public sector banks are trading at reasonable valuations, with healthy capital levels reducing exposure to past asset-quality issues [4] - Top picks include State Bank of India, Punjab National Bank, and Indian Bank [4] Market Reactions - The MSCI India Index has dropped for five consecutive sessions following President Trump's order to overhaul the H-1B visa program, impacting India's $280 billion IT industry [5] - A proposed 100% duty on branded drugs has further pressured pharma shares, leading investors to reconsider expectations for a year-end rally [5] - Foreign investors have resumed selling after a brief period of buying, contributing to the market slump [5]