IT Stocks Outlook for the week(02 - 06.07.2012)
rupeedesk
RUPEE DESK: IT Stocks Outlook for the week(02 - 06.07.2012)
Stocks of major information technology companies are seen positive next week, mainly taking cues from the broad market, which may extend gain on investor optimism following news that European Union leaders had reached a pact to tackle the region's debt issues. The draft guidelines on the General Anti-Avoidance Rules, detailed late Thursday, are also likely to provide support to the domestic market. Yesterday, at the conclusion of the two-day European Union summit, policymakers agreed that the European Stability Mechanism would be able to lend directly to banks to recapitalise them and without a preferential seniority status. There was also an agreement on taking emergency action to lower Italy's and Spain's rising borrowing costs and create a single supervisory body for the banks in Eurozone by the end of this year. However, the upside in shares of IT stocks may be capped as steps announced by the European Union leaders will strengthen euro in the coming sessions, which will provide spillover support to the rupee against the dollar. Indian software exporters remain vulnerable to the movement of rupee against the greenback as they get nearly 65% of their revenue from the US. If the rupee appreciates, it is not a good sign for IT companies and that could limit the rise (in IT stocks next week), but overall there is no major event next week and so companies will take cues from the market.
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