 "Nifty IT index up over 4%; Infosys, HCL Tech up 5%")
Shares of information technology (IT) companies were in focus as most frontline stocks liek Tata Consultancy Services (TCS), Infosys, HCL Technologies and Tech Mahindra gained more than 4% each on the National Stock Exchange (NSE).
Wipro, Tata Elxsi, Mindtree, Oracle Financial Services Software and KPIT Technologies also rose between 3% and 4%.
At 11:23 am, Nifty IT index was the largest gainer among sectoral indices, up 4.6% as compared to 1.17% rise in the Nifty50 index. In past four trading session, IT index has outperformed the market by gaining 6.8% against 1.6% rise in the benchmark index.
Wipro, Tata Elxsi, Mindtree, Oracle Financial Services Software and KPIT Technologies also rose between 3% and 4%.
At 11:23 am, Nifty IT index was the largest gainer among sectoral indices, up 4.6% as compared to 1.17% rise in the Nifty50 index. In past four trading session, IT index has outperformed the market by gaining 6.8% against 1.6% rise in the benchmark index.
In calendar year 2016 (CY16), Nifty IT index had underperformed the market. It fell 16% as compared to marginal 0.21% decline in Nifty 50 index till November 21.
The three chief cyclicals that converged to hit India IT in H2CY16 include a slowdown in financial services & insurance (BFSI) especially as interest rates remained low beyond expectations, BREXIT, which has likely impacted the pace of decision-making by clients to some extent, and US election uncertainty, according to analysts JP Morgan.
Analysts think the calendar year 2017 will be better for the IT sector as the impact of some of these cyclical factors should recede in going into 2017, potentially converting into tailwinds.
“Most notably, with rising yields in the US, we expect BFSI spending to improve – given the significance of this sector, a reasonable bounce-back in spending here should lead to higher sector growth in 2017 by around 2% points,” JP Morgan said in a report dated November 21.
“Unexpected turnout in US election, BREXIT, cautions guidance from NASSCOM (8-10%) and speculation of Fed rate hike in December 2016 has already lowered the valuations of Indian IT companies,” according to analyst at IndiaNivesh Securities.
“Companies’ inorganic initiatives not only enhance capability but also bring lot of cross selling opportunities. Additionally, depreciation in domestic currency (v/s USD) will lead to temporary gain in the coming (1 or 2) quarters. We believe that it will take couple of quarters to get clear picture of the growth trajectory of the overall IT sector and corrected valuations of IT companies seems attractive,” the brokerage firm said in recent report.
| COMPANY | LATEST | PREV CLOSE | GAIN(%) |
| HCL INFOSYSTEMS | 45.80 | 42.35 | 8.15 |
| TRIGYN TECHNO. | 98.80 | 93.60 | 5.56 |
| HCL TECHNOLOGIES | 807.60 | 766.15 | 5.41 |
| MAJESCO | 386.10 | 366.65 | 5.30 |
| HEXAWARE TECH. | 200.40 | 190.45 | 5.22 |
| NIIT TECH. | 422.00 | 401.20 | 5.18 |
| INTELLECT DESIGN | 143.30 | 136.30 | 5.14 |
| MASTEK | 140.80 | 133.95 | 5.11 |
| INFOSYS | 979.20 | 932.70 | 4.99 |
| ALLSEC TECH. | 317.00 | 302.25 | 4.88 |
| FIRSTSOUR.SOLU. | 37.40 | 35.70 | 4.76 |
| SQS INDIA BFSI | 725.00 | 692.90 | 4.63 |
| TCS | 2280.05 | 2186.50 | 4.28 |
| R S SOFTWARE (I) | 79.00 | 75.80 | 4.22 |
| TECH MAHINDRA | 478.35 | 459.55 | 4.09 |
| GEOMETRIC | 243.00 | 234.30 | 3.71 |
| KPIT TECH. | 132.00 | 127.35 | 3.65 |
| MINDTREE | 479.05 | 462.25 | 3.63 |
| SONATA SOFTWARE | 153.35 | 148.10 | 3.54 |
