IT Stocks Outlook for
the week – 03 to 07.10.2016
Investors to remain
cautious next week
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Investors are expected to remain cautious over the
information technology sector next week due to
dissatisfactory earnings growth guidance by US-based IT
major Accenture Plc. The company expects
a 5-7% rise in sales for the financial year ending August
2017, and its operating margin are likely to
be in the range of 14.7-14.9%, up 10-30 basis points on
year. Lower-than-expected earnings growth
guidance by Accenture implies that Indian IT companies might
also have trouble securing orders.
Market participants would be averse to risk-taking as they
await the results of sector leaders Infosys
and Tata Consultancy Services. Infosys will detail its
Jul-Sep earnings on Oct 14.
Volatile rupee and geopolitical tensions are also likely to
weigh on the sector which constitutes of
major software and services' exporters. Meanwhile, sentiment
in the broader market is likely to be
positive even as the market awaits the Reserve Bank of India's
monetary policy on Tuesday. Positive
sentiment in broader market may be favourable for IT sector.
HCL Technologies is seen rising next
week on attractive valuations and improved investor
sentiment. Stocks of Infosys and TCS are seen
trading in a range with a positive bias. Negative view on
Tech Mahindra and Wipro is seen
continuing.