IT Stocks Outlook
Seen higher next week; Fed meet in focus
This story was originally published at 20:54 IST on 13 September 2024
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MUMBAI – Shares of information technology companies are expected to trade with a positive bias next week owing to expectations of an interest rate cut by the US Federal Reserve on Wednesday, according to analysts. Lower interest rates are expected to prompt companies in the US to increase spending on information technology, which is likely to improve demand for Indian IT companies.
The Nifty IT index touched an all-time high of 43571.65 today. This week, the index ended 2.8% higher at 43394.35, outperforming both the Nifty 50 and the Sensex, which ended 2% and 2.1% higher, respectively. All constituents of the information technology index ended higher on a week-on-week basis, with shares of Coforge gaining the most, followed by those of Wipro.
"After a brief pause last week, the IT index resumed its uptrend and outperformed the broader markets overall. The rally was broad-based, with both large-cap and mid-cap stocks contributing to the move," said Rajesh Bhosale, technical analyst at Angel One. "Given a key range breakout on the higher time frame chart, we expect this performance to continue, and any dip should be viewed as a buying opportunity."
After a challenging period marked by global uncertainties, inflation, and reduced budgets, signs of stabilisation are emerging. A rate cut by the Federal Reserve could benefit the information technology sector by easing financial conditions and improving client spending, according to analysts.
TOP HEADLINES
* HCL Tech UK completes Zeenea acquisition for 23.9 mln euros
* Intellect Design Arena launches eMACH.ai platform in Sri Lanka
* Easy Trip launches ScanMyTrip on Open Network for Digital Commerce
* Affle India gets patent to optimise user tracking for digital advt
* PRESS: CCI probe confirms anti-competition charges against Amazon
* Infosys, Clearstream partner on digital security issuance platform
* Wipro to help JFK Intl Air Terminal build AI-enabled data strategy
* Mphasis partners US co AgentSync for insurance compliance solutions
* NCLT issues notice to Byju's on plea by Aditya Birla Finance
* Aim to up electronics sector size to $500 bln by decade end, says PM
* Swiggy Instamart starts ops in 11 cities in 2 mos, now in 43 cities
* Persistent Systems to buy select assets of SoHo Dragon for $4.7 mln
* Govt to follow stable policy regime for semiconductor sector, says PM
* Govt to create cyber suspect registry at national level
* Infosys, Belgium's Proximus to partner for digital security solutions
* TCS in pact to digitally transform Mansfield Building Society ops
* PRESS: New IT policy with focus on exports, jobs, skilling by yr-end
* IPO Alert: Hexaware Tech files papers for 100-bln-rupee OFS-only IPO
* IPO Alert: iValue Infosolutions files draft papers with SEBI for OFS
* PRESS: Swiggy to use IPO funds to double Instamart stores
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 | 1812.80 | 3.20 | 1833.80 | 1785.10 |
| Infosys | 1944.10 | 2.20 | 1969.10 | 1923.20 |
| L&T Technology Services | 5777.50 | 2.80 | 5882.80 | 5632.00 |
| LTIMindtree | 6416.20 | 4.10 | 6508.40 | 6293.90 |
| Persistent Systems | 5359.90 | 3.30 | 5440.40 | 5254.70 |
| Tata Consultancy Services | 4522.60 | 1.50 | 4566.90 | 4482.90 |
| Tech Mahindra | 1656.05 | 2.00 | 1673.20 | 1629.40 |
| Wipro | 550.60 | 5.80 | 566.30 | 523.00 |
| Nifty IT | 43394.35 | 2.80 | 43900.70 | 42736.20 |
| Nifty 50 | 25356.50 | 2.00 | 25497.90 | 25221.80 |
| S&P BSE Sensex | 82890.94 | 2.10 | 83318.70 | 82439.30 |
End
Reported by Darshan Nakhwa
Edited by Avishek Dutta
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