FIIs bet $1 billion on IT stocks before Q3 results. Does it signal a happy new year?
Q3 results season, which kicks off on Thursday, January 9, with Tata Consultancy Services (TCS) announcing its December quarter results, foreign institutional investors (FIIs) have loaded up their portfolios with IT stocks worth over $1 billion.
Out of the net investment of Rs 15,446 crore by FIIs in December, about two-thirds (Rs 9,050 crore) went into IT stocks, according to NSDL data.
While the Q3 numbers are likely to be a mixed bag for IT services exporters, as the December quarter is typically weak seasonally due to holidays and furloughs, FIIs are betting that FY25 could mark the bottom of revenue growth for Indian IT companies.
«As we head into 2025, the macroeconomic environment is far better placed than it has been in the last two years. The Fed rate cut is no longer a hope but is well underway; inflation appears to be under control; and the US election is behind us, with the new administration seen as business-friendly,» BNP Paribas analyst Kumar Rakesh said.
Stating that the Indian IT services sector is one of the only plays in India on the US monetary and fiscal easing cycle available to domestic investors, he said that dollar strength, inventory restocking, and retail consumer-friendly themes will aid Indian IT.
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