GOLDEN RULES FOR TRADING

IT Stocks Outlook for the week – 06 to 09.09.2016 Subdued next week as negative view to continue

IT Stocks Outlook for the week – 06 to 09.09.2016
Subdued next week as negative view to continue

Stocks of information technology companies are expected to trade in a narrow range with a negative
bias next week as investors continue their cautious stance on the sector. Buying in the IT sector is
expected to be limited to select frontline companies in the four-day truncated week. Mindtree
yesterday issued a profit warning that due to various challenges it expects weaker sales and
operating margin in Jul-Sep as compared to the quarter ended June. Sector leader Infosys has
already said that Brexit-led challenges will continue to impact the company's earnings and indicated a
likely second-time revision in sales growth guidance for 2016-17 (Apr-Mar).

With Mindtree issuing a profit warning, this confirms that the financial year is a complete washout for the entire IT sector. Stocks of Mindtree, which ended down 0.9% at 548.85 rupees yesterday. Stocks of other IT companies are also expected to be impacted as concerns over performance of peer
companies would raise. Any rise in the stocks would be momentary as investors may chose to exit
the company.