Anand James advises on Nifty IT index oversold zone pull back due to seasonality. Stocks like TCS, Infosys, Wipro, Tech Mahindra, Mphasis may lead the rebound. Watch for dead cat bounce risk, short covering rallies, and potential breakout signals in PSU stocks. James says: "Should Nifty Bank manage to push above 49100, one could brace for short covering rallies with eyes on 49500 in initially."
LTIMindtree faces increased vulnerability due to its focus on discretionary spending, but management is optimistic about future growth and continues to pivot towards non-discretionary spending
Indian equity markets decline amid unconfirmed reports of explosions in Iran, Iraq, and Syria, impacting stocks globally. Asian markets see significant losses. US Fed rate cut likelihood diminishes. Oil prices surge due to Middle East tensions. Gold prices rally despite strong US economic data.
In a recent note, brokerage house Ambit Capital noted that the March quarter (Q4) outlook doesn’t suggest immediate recovery for IT. It prefers Tier-1 IT over Tier-2 IT.
Technology spending in the banking, financial services and insurance sector is expected to bounce back as monetary policy begins to loosen globally, but unless client budgets increase significantly, the risk of revenue-growth disappointments remains.