GOLDEN RULES FOR TRADING

IT Stocks Outlook for the week – 13 to 17.06.2016 (Infosys to set trend for sector next week)

IT Stocks Outlook for the week – 13 to 17.06.2016
(Infosys to set trend for sector next week)



The Information technology stocks are likely to trade on a cautious note next week,
with shares of Infosys seen lending direction to other stocks in the sector. Shares of
Infosys, which touched a one-month low intraday on Friday, are seen falling further
next week.

Earlier in the week, the management of the Bengaluru-based firm said its Apr-Jun
operating margin is likely to fall by 200 basis points on quarter due to ongoing
investments, increased visa costs and wage hikes. In Jan-Mar, the software major's
operating margin was at 25.5%. The company also said it is currently facing softness in some sectors and may post a volatile performance.

These comments from the management of industry leader Infosys are seen leading to
negative sentiment on the sector and are detrimental specifically to Tata Consultancy
Services' performance. Shares of HCL Technologies and Wipro gained from the
negative view on Infosys and TCS during the week. However, the movement is
expected to be temporary, and shares are likely to fall on negative sentiment in the
sector.