I.T Stocks Outlook for the week – 22 to 26.02.2016
( www.rupeedesk.in )
Stocks
of information technology companies are seen trading with a
positive
bias next week on the back of weakening rupee and recovering
broader
equity market. In fact, they expect IT stocks to outperform the
broader
market.
On
Wednesday, the Indian currency had closed at 68.47 against the
dollar,
its lowest closing level since Aug 28, 2013.
There
may be some volatility in the broader market next week on account
of
the expiry of derivatives contracts on Thursday and this may peculate
to
movement in some IT stocks too.
While,
Nifty 50 had risen 3.3% this week, the CNX IT Index rose 4.3%
and
the IT stocks are likely to lead further recovery in the broader market
next
week also.
Announcements
of acquisitions by industry majors such as Wipro and
HCL
Technologies this week have improved investment sentiments for
the
sector. Wipro announced its plan acquire US-based insurance
technology
provider HealthPlan Services for $460 mln, while HCL
Technologies
has initiated take over of Volvo Group's IT arm.
Also,
the market will take cues from Budget Session that starts Tuesday
before
taking bets. The sectors expects major reforms including
exemption
from minimum alternate tax, clarity on transfer pricing norms
and
Goods and Services Tax scheme implementation from the upcoming
Budget.