Market News
3 min read | Updated on January 17, 2024, 18:51 IST
SUMMARY
IT, with the second-highest sectoral weightage of 13.6% in the NIFTY50 index, secured only a meagre 0.4% of the total FPI purchases in the fiscal year so far
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"We believe the IT sector is going through a classical sector rotation trade in favour of it," said Sanjay Bembalkar, chief investment officer and head of equities at Union Mutual Fund.
"We expect investors, both foreign and domestic to increase allocations further on clarity over change in monetary policy stance in the US," he said.
"FPI holding of India's IT services sector is materially below the last 10 year average," said Kumar Rakesh, associate director of equity research at BNP Paribas.
"We would expect their buying to return in 2024, as the sector goes through a cyclical recovery," said Rakesh. He expects investors with an "equal" or "underweight" position on IT stocks to shift to "equal" or "overweight," reflecting a large allocation in portfolios.
Market leader TCS and second-ranked Infosys reported third-quarter revenue growth that beat expectations, with more optimistic forecasts.
"This time commentary is backed by sustained strong deal booking, and expectation that after three - four quarters of project re-prioritization we have crossed point of maximum pain," said Santosh Pandey, head of Nuvama Professional Clients Group.
Pandey expects increased buying interest in IT stocks over the next three to four months, leading up to their March-quarter earnings when these companies provide annual growth guidance.
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