IT stocks stand out as Trump win boosts spending bets
Indian IT service providers’ stocks are poised for a further run-up after a recent rally, bucking the weak sentiment in other sectors as Donald Trump’s return generates expectations of a stronger dollar and greater tech outsourcing.
A benchmark gauge of the industry, led by India’s IT export stalwarts like Infosys Ltd. and Tata Consultancy Services, has risen about 7% in November, outperforming other sectors in the country. It’s also outpacing competitors elsewhere in the region, with MSCI Asia Pacific Information Technology Index falling about 3% this month.
Demand from overseas clients continues to improve and Trump’s plans to cut corporate taxes bode well for US technology spending, Sunil Kaul, a strategist at Goldman Sachs Group Inc., said. A stronger dollar also is a boon for exporters as they earn in the greenback.
The sector is providing an outlet for India investors who are rattled by weak earnings in other industries and foreign outflows that have gathered pace, totaling about $12 billion since the start of October. The stock moves also reflect exporters’ shifting fortunes caused by President-elect Trump’s early policy indicators, including vows to raise tariffs for goods manufacturers.
“IT stocks are candidates for possible earnings upgrades,” Kaul said, adding the dollar’s strength will further boost Indian IT companies’ profits. “Service exports are likely to be immune to Trump’s tariffs.”
Stock Trading
Technical Analysis Demystified: A Complete Guide to Trading
By — Kunal Patel, Options Trader,
