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Information technology stocks are likely to be range bound in the coming week as the interim budget to be presented on Monday is unlikely to include any major announcements. IT stocks bounced back this week following some profit booking late last month. As expected, the National Association of Software and Services Companies projected a 13-15% growth rate for IT and IT-enabled services exports for the next financial year, ahead of its estimate of a 13% growth in current year. IT stocks recovered some losses seen at the end of January but are still about 3-5% below highs seen in the third week of January. An exception was HCL Technologies, which gained 6.9% last week, ended the week at an all-time high of 1,497.35 on Friday.
The Union government will present an interim budget on Monday, but the proposals are unlikely to contain any big news for IT sector. Market participants are keeping cautious approach and awaiting this event to get over before initiating any fresh bets. Any indirect-tax benefit will have an impact on stock prices. At its annual leadership event held in Mumbai this week, industry association National Association of Software and Services Companies outlined a threat to the current business models of IT companies from the emergence of disruptive technologies such as cloud computing. Companies outlined their respective strategies to deal with the impending threat.
While Tata Consultancy Services and Infosys Ltd said they will develop their own cloud computing platforms, others such as Tech Mahindra and Zensar Technologies have pointed to a more service-oriented approach. More news on the companies' strategies is also likely to influence investor sentiment on the stocks next week.
Information technology stocks are likely to be range bound in the coming week as the interim budget to be presented on Monday is unlikely to include any major announcements. IT stocks bounced back this week following some profit booking late last month. As expected, the National Association of Software and Services Companies projected a 13-15% growth rate for IT and IT-enabled services exports for the next financial year, ahead of its estimate of a 13% growth in current year. IT stocks recovered some losses seen at the end of January but are still about 3-5% below highs seen in the third week of January. An exception was HCL Technologies, which gained 6.9% last week, ended the week at an all-time high of 1,497.35 on Friday.
The Union government will present an interim budget on Monday, but the proposals are unlikely to contain any big news for IT sector. Market participants are keeping cautious approach and awaiting this event to get over before initiating any fresh bets. Any indirect-tax benefit will have an impact on stock prices. At its annual leadership event held in Mumbai this week, industry association National Association of Software and Services Companies outlined a threat to the current business models of IT companies from the emergence of disruptive technologies such as cloud computing. Companies outlined their respective strategies to deal with the impending threat.
While Tata Consultancy Services and Infosys Ltd said they will develop their own cloud computing platforms, others such as Tech Mahindra and Zensar Technologies have pointed to a more service-oriented approach. More news on the companies' strategies is also likely to influence investor sentiment on the stocks next week.
