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Markets today - IT stocks set to dazzle on the bourses

Frontline indices fell nearly 4 per cent in November. But, analysts expect sectoral-rotation to take place from here on. This report delves into one such sector and the stocks that are likely to shine

Stock Market | Nifty IT stocks | Star Health Insurance

Nikita Vashisht  |  New Delhi 

The BSE Sensex and the Nifty50 ended the month of November on a weak footing as fears that the new Omicron Covid-19 variant could potentially evade vaccines, rattled investor confidence. On Tuesday, the benchmarks ended over quarter per cent down, resulting in a monthly fall of around four per cent. The BSE benchmark index shed over 2,200 points or 3.7 per cent during the month, while the 50-pack Nifty index erased around 690 points to post their biggest monthly fall since March 2020. Going-forward, Naveen Kulkarni, who is the chief investment officer at Axis Securities believes related to Omicron, oil prices and dollar index movement will keep the volatile in the near-term. As the FIIs have been net sellers in November, the support of domestic institutional investors, he says, will be critical to sustain market at the current levels. He advises investors to choose stocks of companies with high earnings visibility and rotate funds between sectors that will likely deliver superior returns. One such sector which investors can bet on, to ride the current defensive market mood, is Information Technology. Despite a weak market closing yesterday, the Nifty IT index ended over 0.5 per cent higher with individual stocks such as LTTS and Coforge ending with gains of up to 1.5 per cent. Over the past six months, the Nifty IT index has advanced 29 per cent on the NSE, as against a 10 per cent surge in the Nifty50 index. Accelerated revenue in Q2, broad-based demand and a healthy deal pipeline are some of the reasons for this outperformance, say analysts at Emkay Global Financial Services. Although, seasonal factors such as lower working days and furloughs will weigh on the Q3 sequential growth trajectory, they expect the revenue momentum to continue throughout FY22. So, which stocks should you add to your portfolio for double-digit returns? Let’s go to Business Standard’s Avdhut Bagkar for a quick tech check. Fundamentally analysts at Emkay Global expect Infosys, Tech M, HCL Tech, and Mphasis to rally up to 25 per cent over the short-to-medium term. Coming to today’s trades, global cues and developments around the new virus variant will guide the indices on Wednesday. Back home, reaction to Q2 GDP data and primary market activity will support the sentiment. The three-day public issue of will enter its second day today.

The Rs 7,249-crore IPO has been subscribed less than 15-per cent so far and will close tomorrow. That apart, the public offer of Tega Industries will also open for subscription today. The mill-liner producer’s company aims to raise Rs 619 crore and has fixed a price band of Rs 443-453 per share.

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First Published: Wed, December 01 2021. 08:00 IST