IT Stocks Outlook
Seen range-bound; Jul-Sep results to give direction
This story was originally published at 21:13 IST on 27 September 2024
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MUMBAI - Shares of information technology companies are expected to see range-bound movement for the next few weeks, and are likely to get a direction only after the Jul-Sep earnings announcements, according to analysts. IT stocks have been on a bullish run since June, and started witnessing selling for profit before the interest rate cut announcement by the US Federal Reserve. The sectoral Nifty IT index has gained 32% over the past three months.
This week, the Nifty IT index closed 0.3% higher at 42312.60. Of the 10 constituents of the index, six ended higher week-on-week and the remaining declined. While HCL Technologies and Mphasis were among the top gainers, LTIMindtree and L&T Technology Services were among the top losers. Compared to the Nifty IT, the benchmark Nifty 50 and the Sensex gained 1.5% and 1.2%, respectively.
"Nifty IT index experienced a muted week, and although there was some traction on Friday, it lost momentum at higher levels," said Rajesh Bhosale, technical analyst at Angel One. "However, key heavyweights are beginning to show signs of strength, and the IT sector is likely to join the broader market rally in the coming week. Traders should keep an eye on these opportunities."
Ruchit Jain, a lead analyst at 5paisa, said, "After an interest rate reduction by the US Federal Reserve, we haven't seen a significant run-up in IT stocks. Even after the Accenture result, the IT index opened higher, but did not manage to maintain those levels. There is a lack of follow-up buying on positive news in the sector. This is a sign of a time-wise corrective phase. Investors are likely to wait for the quarterly numbers."
Accenture reported higher-than-expected revenue for the August quarter and raised its revenue guidance for 2024-25 (Sep-Aug). As per Morgan Stanley, Accenture's earnings are neutral to slightly positive for the sentiment towards Indian IT companies, as organic growth in the August quarter was positive. Accenture's guidance also confirmed expectations of organic growth improving over the next 12 months.
TOP HEADLINES
* LTIMindtree incorporates new subsidiary in Brazil for IT operations
* PRESS: New digital portal to speed up refund of unclaimed shares
* Accenture Jun-Aug sales beat view, ups 2024-25 sales growth guidance
* IPO Alert: Mouri Tech files draft papers with SEBI
* Infosys, US-based Sally Beauty Holdings in pact for IT transformation
* Labour ministry in pact with Amazon to boost jobs across sectors
* Poor internet key hurdle in Lakshadweep's fincl inclusion, study says
* SC reserves order on BYJU's parent co-BCCI insolvency case
* Bombay HC strikes down amendments to IT rules on fact checking units
* Intellect Design launches AI-driven retail tech platform for West Asia
* ITC buys convertible pref shrs of Sproutlife Food for 300 mln rupees
* FMCG distributors warn of non-cooperation against quick commerce cos
* Infosys to open technology hub for Swedish e-vehicle maker Polestar
* Adani Enterprises incorporates arm Adani GCC for mgmt consultancy svcs
* PRESS: Fin min may grant relief to Infosys' 300-bln-rupee GST notices
* PRESS: Demand for tech recruits seen up 10-12% in Oct-Mar
* Tata Elxsi, Qualcomm Tech team up to integrate fixed wireless access
* Govt extends import authorisations for laptops, tablets till Dec 31
* Mitsubishi Financial Group sells 2.05% stake in Tech Mahindra
* Firstsource arm buys 100% stake in UK's Ascensos for 42 mln sterling
* PRESS: CCI seeks financial statements from Amazon, Flipkart
* PM Modi interacts with US tech CEOs, invites them to invest in India
* Quad announce co-operation to address semiconductor supply-chain risks
* HC judge favours striking down IT rules amendments on fact checks
* SC YouTube channel hacked, streams crypto currency promotion video
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 | 1808.40 | 2.80 | 1843.20 | 1779.20 |
| Infosys | 1906.75 | 0.10 | 1999.50 | 1856.90 |
| L&T Technology Services | 5356.55 | (-)2.10 | 5675.80 | 5181.50 |
| LTIMindtree | 6136.10 | (-)3.70 | 6454.00 | 5946.10 |
| Persistent Systems | 5437.00 | 1.50 | 5643.20 | 5322.60 |
| Tata Consultancy Services | 4308.70 | 0.60 | 4406.90 | 4251.00 |
| Tech Mahindra | 1609.25 | (-)0.80 | 1686.50 | 1566.00 |
| Wipro | 541.80 | 0.50 | 565.30 | 528.90 |
| Nifty IT | 42312.60 | 0.30 | 43761.10 | 41546.30 |
| Nifty 50 | 26178.95 | 1.50 | 26328.50 | 26076.60 |
| S&P BSE Sensex | 85571.85 | 1.20 | 86178.60 | 85171.20 |
End
Reported by Darshan Nakhwa
Edited by Rajeev Pai
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