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Informist, Friday, Nov. 22, 2024

MUMBAI – Shares of information technology companies will likely continue to outperform the benchmark indices next week, with the Nifty IT index currently hovering around record high levels, analysts said. The Nifty IT index, which closed at 43,332 on Friday, is expected to move higher next week, testing its record high of 43,645, a technical analyst at a domestic brokerage said.

If the record high is breached, the index is expected to move towards 44,000-44,200, the analyst said. The benchmark indices, the Nifty 50 and Sensex rose 1.6% and 2%, respectively this week, while the Nifty IT index rose 2.2%.

In the quarter ended September, revenue growth and operating margin of IT companies were broadly in line with expectations. While the demand environment in the September quarter was broadly similar to the June quarter, there are certain green shoots in the demand environment, especially in the banking and financial services segment with growing clients' interest in high-priority IT projects, Centrum Broking wrote in a research note earlier this week.

Analysts said the sector is keenly waiting for January for information on client budgets and spending. "The companies' rapid artificial intelligence spending, US President-elect Donald Trump not increasing visa costs in the US, IT companies ramping up their hiring, and healthy third-quarter results expected from Indian IT companies are all positives for the sector," Rishubh Vasa, banking and IT analyst, Indsec Securities and Finance, said.

Major announcements are expected from IT companies till the end of June. Healthy order pipelines will convert into order books in the second half of the current financial year, Vasa said. He expects to see a consolidation phase in the IT index of around 3,000 points between 40300 and 43300 points in the near term. The policies and approach of the US government and companies towards IT spending is a key metric to watch out for, he said.

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Following are the resistance and support levels for the stocks for next week as per calculations by Informist based on their prices on the National Stock Exchange:

End

Reported by Anand J.C.

Edited by Saji George Titus

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