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Information Technology stocks are likely to trade in a narrow band in an overall market that is likely to show a negative bias, ahead of Infosys' third-quarter results. Infosys will report its results on Friday, we are looking for an upgrade in the company's guidance for the full-year. The return of Mr. Murthy to Infosys has raised hopes on the medium-to-long term prospects of the company. Based on our expected revenues in 3Q, we expect the company to increase the guidance range. Though Oct-Dec is a traditionally weak quarter, the US market has been gaining strength in recent months, limiting the chances of an underperformance by the IT sector.
Last quarter, Infosys reported numbers well above expectations, leading to a rally in IT stocks that fizzled out later as companies like Wipro and HCL Technologies failed to significantly outperform expectations. The market is likely to be more circumspect this quarter, even if Infosys reports better-than-expected numbers on Friday.
In addition, the Bangalore-based company also said it was dismantling its key decision making body in favour of a traditional pyramid-based approach to decision making, and on Friday appointed two new presidents to oversee its business.
IT companies will not get any help from rupee devaluation in the December quarter as the dollar-rupee rate has remained largely unchanged on quarter. The overall down sentiment in the market is likely to result in nervousness next week in IT stocks as well. In the week that passed, overall IT stocks held up even as the broader market slipped.
Information Technology stocks are likely to trade in a narrow band in an overall market that is likely to show a negative bias, ahead of Infosys' third-quarter results. Infosys will report its results on Friday, we are looking for an upgrade in the company's guidance for the full-year. The return of Mr. Murthy to Infosys has raised hopes on the medium-to-long term prospects of the company. Based on our expected revenues in 3Q, we expect the company to increase the guidance range. Though Oct-Dec is a traditionally weak quarter, the US market has been gaining strength in recent months, limiting the chances of an underperformance by the IT sector.
Last quarter, Infosys reported numbers well above expectations, leading to a rally in IT stocks that fizzled out later as companies like Wipro and HCL Technologies failed to significantly outperform expectations. The market is likely to be more circumspect this quarter, even if Infosys reports better-than-expected numbers on Friday.
In addition, the Bangalore-based company also said it was dismantling its key decision making body in favour of a traditional pyramid-based approach to decision making, and on Friday appointed two new presidents to oversee its business.
IT companies will not get any help from rupee devaluation in the December quarter as the dollar-rupee rate has remained largely unchanged on quarter. The overall down sentiment in the market is likely to result in nervousness next week in IT stocks as well. In the week that passed, overall IT stocks held up even as the broader market slipped.
