I.T Stocks Outlook
for the week – 29.08.2016 to 02.09.2016
(Subdued next week;
to negative bias)
Stocks of information technology companies are expected to
continue their downward
trend next week as negative bias over the sector is largely
expected to continue. The
only solace would be possibility of depreciation in Indian
currency next week that may
cap the fall in stock of Indian software exporters.
Weakness in the broader market is also seen weighing on the
IT stocks after Federal
Reserve Chair Janet Yellen who at the Jackson Hole Economic
Policy Symposium
signalled likely hood of an interest rate hike soon. Yellen
said the case for another
interest rate hike is strengthening, sending a strong signal
the US central bank is
preparing to increase rates at of the Federal Open Market
Committee meeting to be held
on Sep 20-21.
Infosys Ltd said that it expects uncertainties created by
'Brexit' to continue and the loss
of a contract from the Royal Bank of Scotland may not be a
one-off case. The company
said clarity on the extent of impact of Brexit on it will
emerge in October but did not
clarify whether it will review or retain its sales growth
guidance for 2016-17 (Apr-Mar).
This
further dampened the view on its stock and on the sector.