IT Stocks Outlook: Range-bound next week with negative bias Saturday, Sep 6
Information technology shares are likely to move sideways next week, but bias is negative after a weak U.S. economic data raised concerns of earnings visibility of these companies. Indian IT companies derive a major part of their export revenue from U.S. Shares are likely to remain range-bound next week. IT stocks were battered after data showed a rise in jobless claims in U.S. This affected the sentiment. Further weakness in Indian rupee against dollar can lift sentiment in the sector, but gains are seen capped as investors might book profits. Market participants would also await weekly jobless claims data from U.S. Labor Department due Thursday. If next week data too comes out weak, the shares can plunge further as the health of U.S. economy is the main driver for these shares. The sector's reaction to rupee fluctuation would remain muted till the business outlook clears. Demand environment is continuously deteriorating. Also companies' hiring plans are not proceeding as per schedule and most of these companies are yet to announce any significant business deals. All these raise concerns over the long term profitability of these companies. There are talks of Citigroup, UBS cutting client budgets this year and soon other big companies might also follow. If that happens there are no prospects in putting money in IT stocks for the next one year. There might be some select buying in mid-cap shares especially stocks like Rolta India, if the outcome of the Nuclear Suppliers Group meet is positive for India. The stock is seen as a major beneficiary if the nuclear deal goes through. Week-on-week closing prices of key software shares, in rupees, on National Stock Exchange: Company Sep 5 Aug 29 Change (in %) HCL Technologies 244.40 233.15 4.8 Infosys Technologies 1,712.30 1,749.10 (-)2.1 Satyam Computer Services 416.35 419.70 (-)0.7 Tata Consultancy Services 838.40 812.20 3.2 Wipro 424.85 432.40 (-)1.8 INDICES CNX IT Index 3927.40 3926.80 0.0 NSE Nifty 4352.30 4360.00 (-)0.2 BSE Sensex 14483.83 14564.53 (-)0.6 End B.Karthick Research Analyst. --~--~---------~--~----~------------~-------~--~----~ You received this message because you are subscribed to the Google Groups "Kences1" group. To post to this group, send email to [email protected] To unsubscribe from this group, send email to [EMAIL PROTECTED] For more options, visit this group at http://groups.google.com/group/kences1?hl=en -~----------~----~----~----~------~----~------~--~---
