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Informist, Thursday, Nov 14, 2024

MUMBAI - Shares of information technology companies are expected to trade with a positive bias and will take cues from developments in the US, in the absence of major domestic triggers, according to analysts. Domestic IT companies have major exposure to the US, some of whose revenue share from clients in the world's largest economy is around 60%. Investors will watch out for the likely economic policies to be implemented by US President-elect Donald Trump, once he takes charge in January. 

This week, the Nifty IT index closed 0.8% higher at 42390.85 points. In comparison, the benchmark Nifty 50 and the BSE Sensex declined 2.6% and 2.4%, respectively. Next week, support for the IT index is seen at 41925.40 and resistance at 42865.80.

Of the 10 constituents of the Nifty IT index, seven gained week-on-week, while the rest declined marginally. Infosys and Coforge were among the top gainers. Mphasis, Wipro, and Tata Consultancy Services ended marginally lower.  

The Nifty IT index has shown relative resilience in November, even as other benchmark indices succumbed to selling pressure. The IT index has gained nearly 5% so far this month. In comparison, the benchmark Nifty 50 has declined 2.8% and the Sensex has fallen 2.3%. Analysts anticipate this trend to persist, with the IT sector likely to outperform.

Indian IT companies have felt the heat of a weak macroeconomic environment in the US for more than a year, due to higher interest rates and lower discretionary spending. However, the interest rate cut announcements by the US Federal Reserve at its September and November meetings brought some cheer to the IT space. Additionally, the Jul-Sept earnings showed some signs of recovery in demand and positive comments for 2025-26 (Apr-Mar). 

According to analysts, the Nifty IT has not given the kind of return in year-to-date terms as the Nasdaq-100 Technology Sector Index has. This margin is expected to reduce with the developments in the US and other key markets. 

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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:

End

Reported by Darshan Nakhwa 
Edited by Tanima Banerjee

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