IT Stocks
Outlook for the week – 22 to 26.12.2014
( www.rupeedesk.in )
Information technology stocks are
likely to show resilience if the broad market continues to
exhibit volatility next week, but
may underperform the Nifty if the market bounces back.
Last week, IT stocks outperformed
the broad market due to their value as a defence against
market volatility, the sharp fall
in the value of the rupee against the dollar, and due to a
robust outlook by global peer
Accenture.
IT stocks moved higher as Accenture
gave an upgraded outlook on revenue and elevated levels
of rupee along with strength in
global tech stocks lifted IT. We expect some more volatility in
the Indian market and that the US
Federal Reserve's unexpectedly dovish comments last week is
likely to ensure stability going
forward.
In case of volatility and
continued weakness in the value of the rupee against the dollar,
defensive sectors such as IT,
pharmaceuticals, and consumer goods are likely to find favour.
We see an upside in information
technology stocks despite volatility in the rupee. Among stocks,
Tata Consultancy Services saw a
correction this week due to a weak trading update, while Infosys and HCL Technologies saw good demand.
