IT Stocks Outlook
Seen consolidating next wk due to weak global cues
This story was originally published at 06:00 IST on 3 August 2024
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MUMBAI - Shares of information technology companies are expected to consolidate next week on account of weakness in global markets due to worries of a slowdown in the US, according to analysts. This week, the Nifty IT index closed 3% lower at 39730 points, with all 10 constituents of the index ending lower. In comparison, the Nifty 50 and Sensex declined 0.5% and 0.4%, respectively.
"The IT sector saw a sharp sell-off due to weakness in the global market. Further weakness is expected, potentially testing the index levels of 38,500. If this level is reached, it would be an ideal point to consider re-entering long positions," said Rajesh Bhosale, a technical analyst at Angel One.
Global markets were down today as weak employment numbers and lacklustre manufacturing activity in the US aggravated worries of a slowdown in the country. The US is a key market for Indian IT companies.
"The IT index has rallied for the last six weeks. Now we are seeing unwinding of positions due to global uncertainty. However, the long-term trend is not negative," said Ruchit Jain, a lead analyst at 5paisa.
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Following are the resistance and support levels for the sector's key stocks for next week, as per calculations based on their prices on the National Stock Exchange:
| Company | Price | Week-on-week change in % | Resistance | Support |
|---|---|---|---|---|
| HCL Technologies | 1609.30 | (-)1.60 | 1654.30 | 1578.60 |
| Infosys | 1821.20 | (-)3.10 | 1875.60 | 1788.90 |
| L&T Technology Services | 5100.60 | (-)2.20 | 5303.60 | 4918.40 |
| LTIMindtree | 5509.90 | (-)4.80 | 5740.60 | 5364.70 |
| Persistent Systems | 4636.35 | (-)2.90 | 4842.00 | 4524.10 |
| Tata Consultancy Services | 4283.05 | (-)2.40 | 4445.00 | 4189.00 |
| Tech Mahindra | 1507.70 | (-)2.20 | 1545.80 | 1483.30 |
| Wipro | 502.15 | (-)4.30 | 525.70 | 489.20 |
| Nifty IT | 39730.30 | (-)3.00 | 40978.00 | 39038.80 |
| Nifty 50 | 24717.70 | (-)0.50 | 24917.20 | 24587.10 |
| S&P BSE Sensex | 80981.95 | (-)0.40 | 81542.20 | 80588.80 |
End
Reported by Darshan Nakhwa
Edited by Deepshikha Bhardwaj
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