IT Stocks Outlook for the week – 23 to 27.01.2017
IT Stocks Outlook for the week – 23 to 27.01.2017
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IT Stocks Outlook for the week – 23 to 27.01.2017
( www.rupeedesk.in )
Stocks of information technology companies are seen trading in a narrow range with a negative bias in the week ahead, as market participants will take cues from US President-elect Donald Trump's speech later yesterday. Trump will be sworn in as the 45th US President later in the evening yesterday and is likely to speak on his path ahead. Trump in his addresses earlier has indicated protectionist policies to control immigration and employment laws. With his swearing-in as president, the possibility of adverse changes in US' working visa norms has heightened. Indian IT companies are highly dependent on US work visas as a large number of employees are hired to work on US-based projects. The main proposal for changes in H-1B visa norms is an increase in minimum wages to be $100,000 annually, up from $60,000 currently. Though IT stocks are expected to be under pressure, depreciation in the Indian currency has lent some support, and is likely to arrest any major fall in the stocks. Next week, investors would also focus on the results of two major IT companies, HCL Technologies and Wipro, scheduled during the week. Robust earnings of the companies are likely to lift sentiment for the sector. We are expecting HCL Technologies and Wipro to follow the same path of Infosys and TCS (Tata Consultancy Services) to cut their guidance. While analysts' worries were eased with the Oct-Dec performance of TCS, Infosys' move to trim its dollar sales guidance for current financial year to 7.2-7.6% led to increased uncertainty in the sector.
Stocks of information technology companies are seen trading in a narrow range with a negative bias in the week ahead, as market participants will take cues from US President-elect Donald Trump's speech later yesterday. Trump will be sworn in as the 45th US President later in the evening yesterday and is likely to speak on his path ahead. Trump in his addresses earlier has indicated protectionist policies to control immigration and employment laws. With his swearing-in as president, the possibility of adverse changes in US' working visa norms has heightened. Indian IT companies are highly dependent on US work visas as a large number of employees are hired to work on US-based projects. The main proposal for changes in H-1B visa norms is an increase in minimum wages to be $100,000 annually, up from $60,000 currently. Though IT stocks are expected to be under pressure, depreciation in the Indian currency has lent some support, and is likely to arrest any major fall in the stocks. Next week, investors would also focus on the results of two major IT companies, HCL Technologies and Wipro, scheduled during the week. Robust earnings of the companies are likely to lift sentiment for the sector. We are expecting HCL Technologies and Wipro to follow the same path of Infosys and TCS (Tata Consultancy Services) to cut their guidance. While analysts' worries were eased with the Oct-Dec performance of TCS, Infosys' move to trim its dollar sales guidance for current financial year to 7.2-7.6% led to increased uncertainty in the sector.
