Mphasis Ltd Falls 3.35%: 2 Key Factors Driving the Weekly Decline

16 February: Modest Gains Amid Positive Market Momentum

Mphasis began the week on a positive note, closing at Rs.2,462.10, up 0.26% from the previous Friday’s close of Rs.2,455.70. This modest gain came despite the Sensex rallying 0.70% to 36,787.89, indicating a relatively subdued performance by the stock compared to the broader market. Trading volume was moderate at 5,727 shares, reflecting steady investor interest as the sector maintained a cautious but optimistic tone.

17 February: Slight Advance with Market Support

The stock edged higher to Rs.2,466.35, a 0.17% increase, while the Sensex continued its upward trajectory, gaining 0.32% to 36,904.38. Volume nearly doubled to 9,697 shares, suggesting increased trading activity. Despite the positive price movement, Mphasis’s gains lagged behind the Sensex, signalling early signs of relative weakness that would become more pronounced later in the week.

18 February: Sharp Decline Begins Amid Technical Weakness

On 18 February, Mphasis’s stock price reversed sharply, falling 1.24% to Rs.2,435.65, even as the Sensex rose 0.43% to 37,062.35. This divergence highlighted growing pressure on the stock, with delivery volumes dropping significantly by 70.54% to 1.49 lakh shares, indicating waning conviction among long-term holders. The stock’s decline below key moving averages suggested the onset of a bearish trend, setting the stage for further weakness.

19 February: Open Interest Surges Amid Bearish Signals

The stock suffered a steep 2.32% decline to Rs.2,379.20, underperforming both its sector, which fell 0.29%, and the Sensex, which dropped 1.45% to 36,523.88. This day was notable for a sharp 19.45% surge in open interest in Mphasis’s derivatives segment, rising from 33,628 to 40,167 contracts. Futures volume was robust at 23,621 contracts, with a combined futures and options notional value of approximately ₹92,767.25 lakhs. The spike in open interest alongside falling prices typically signals new short positions or hedging activity, reflecting bearish market sentiment.

Investor participation weakened further, with delivery volumes continuing to decline, suggesting reduced conviction among long-term holders. The stock traded below all major moving averages — 5-day, 20-day, 50-day, 100-day, and 200-day — reinforcing the technical downtrend. The weighted average price of Rs.2,386.20, near the intraday low, indicated significant volume concentration at lower price levels.

20 February: Heavy Put Option Activity Highlights Downside Concerns

Mphasis closed the week at Rs.2,373.55, down 0.24% on the day and 3.35% for the week, while the Sensex rebounded 0.41% to 36,674.32. The day was marked by the highest put option activity among peers, with 3,481 contracts traded at the 2,300 strike price for the 24 February expiry. This activity generated a turnover of approximately ₹25.00 crores, signalling increased bearish sentiment and hedging ahead of expiry.

The 2,300 strike put options were slightly out-of-the-money but close enough to suggest traders anticipate further downside or volatility. Open interest at this strike stood at 1,070 contracts, indicating sustained bearish positioning. The stock’s technical weakness persisted, with delivery volumes falling over 51% compared to the five-day average, and the stock remaining below all key moving averages.

Daily Price Comparison: Mphasis Ltd vs Sensex (16-20 Feb 2026)

Key Takeaways

Bearish Derivatives Activity: The 19.45% surge in open interest on 19 February and heavy put option volume on 20 February highlight growing bearish sentiment and hedging strategies among investors, signalling expectations of further downside or volatility.

Technical Weakness: Mphasis’s stock consistently traded below all major moving averages throughout the week, confirming a sustained downtrend and negative momentum that contributed to the 3.35% weekly decline.

Underperformance vs Sensex: While the Sensex gained 0.39% over the week, Mphasis fell 3.35%, indicating company-specific challenges or sectoral headwinds impacting investor confidence.

Declining Investor Participation: Delivery volumes dropped sharply, suggesting reduced conviction among long-term holders and a shift towards short-term trading or protective positioning.

Mojo Score and Rating: The stock’s Mojo Score of 44.0 and recent downgrade to Sell on 1 February 2026 reflect deteriorating fundamentals and technical outlook, reinforcing the cautious market stance.

Conclusion

Mphasis Ltd’s performance during the week of 16 to 20 February 2026 was characterised by a clear bearish trend, driven by technical weakness and heightened derivatives market activity signalling increased downside risk. The stock’s 3.35% decline contrasted with the broader market’s modest gains, underscoring company-specific pressures. The sharp rise in open interest and heavy put option trading ahead of the 24 February expiry suggest that investors are positioning defensively amid uncertainty. With the stock trading below all key moving averages and delivery volumes falling, the outlook remains cautious. Market participants should continue to monitor price action, derivatives positioning, and sectoral developments closely in the coming weeks.

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