I.
T Stocks Outlook for the week – 12. to 16.01.2015
( www.rupeedesk.in )
Stocks of information technology companies are likely to outperform
the market, if the volatility continues next week, backed by a strong quarterly performance
from Infosys Ltd. India's third biggest IT exporter reported better-than-expected
quarterly numbers today, boosted by strong volume growth that also lifted margins. The company
reported a 5% sequential increase in its net profit due to cost- containment
measures, a strong dollar and good volumes.
Infosys stock, which rose 5% after the results, also dragged up the
entire IT pack with it, bringing the CNX IT index back into the black for the week. The
sentiment was already in favour of IT stocks due to their ability to better withstand market
volatility. The Indian stock market saw extreme volatility this week as profit booking and fears about
overseas money withdrawing saw the index correct by 3% in a single day.
The wider Nifty index was down 1.3% for the week, indicating the
negative bias in the market. We continue to maintain our view to see continued instability over the
next 2-3 weeks, as FII's (foreign institutional investors) outlook will be depended on ECB
meet, Grexit and FED rate decision by month end.
A key event to watch will be Tata Consultancy Services' results, which
will be announced after market close on Thursday. The stock has corrected, along with others
in the sector, in recent days on fears that the IT market has not shown the improvement that
was expected this year.
