IT Stocks Outlook for the week – 31.08.2015 to 04.09.2015
(Up
next week on weak rupee)
Expectation
of healthy demand from the US and a weak rupee are seen lifting information
technology
stocks next week after they corrected in line with the broad market recently.
We
expect the Indian currency to breach the 67 rupees per dollar level ahead of
the US Federal
Reserve
interest rate announcement, which is likely to boost sentiment around the
sector. Friday, the rupee closed at 66.14 per dollar.
Improvement
in US economic data may also be a precursor to improving order book for Indian
IT sector. US companies are seen increasing their spending on IT products and
services. The second estimate of US gross domestic product for Apr-Jun was at
3.7%, up from the initial 2.3% reported in July.
Demand
from European countries is also seen improving as their perspective for
outsourcing
information
technology services to Indian companies is changing. Benchmark indices are
likely to consolidate next week amid an unsteady overall market environment,
led by concerns over the health of the Chinese economy.
