Markets Want New Narrative On AI As Rerating Of IT Firms Near, Says Analyst
A rating of information technology companies is on the cards because of the expected management commentary in the coming earnings season about new contracts, especially related to artificial intelligence, according to Deven Choksey, managing director of DRChoksey Investment Managers Pvt.
"Markets want to see the new narrative. Not sure how much it would reflect in the immediate quarter, but the belief will be that downside (growth) is arrested," he said.
The NSE Nifty IT registered its strongest June performance in over 20 years, with the technology benchmark index advancing over 11.7% last month. This marks the best monthly returns since June 2003 and stands in contrast to a nearly 7% rise in the broader NSE Nifty 50.
Over at the benchmark counters, the NSE Nifty 50 and Bank Nifty can witness a small decline for a day or two, as some oscillators are not supporting the current upward move, said Hemen Kapadia, senior vice president of institutional equity at KR Choksey Stocks & Securities Pvt.
"Currently, we are close to the resistance level. Reliance Industries Ltd. is cooling off; HDFC Bank Ltd. has not broken out (of resistance), while Kotak Mahindra Bank Ltd. could, but not yet," he said.
The Indian benchmark indices recouped losses from last session and closed at all-time highs on Monday, tracking gains in shares of HDFC Bank Ltd. and Infosys Ltd.
The NSE Nifty 50 ended at 131.35 points, or 0.55%, higher at 24,141.95, and the S&P BSE Sensex closed at 443.46 points, or 0.56%, up at 79,476.19.
The recent bump in tyre stocks can be attributed to a catch-up rally in the wider auto space, said Mayur Milak, senior vice president of research, auto and aviation at Asian Markets Securities Pvt.
"In the last two-three months, all auto ranks have seen a sharp rally, except tires. The gap between tyres and others in the auto space was high. The jump (in tyre stocks) is a catch-up game on valuation rather than fundamentals," he said.
Moreover, sales figures for tractors have met expectations, but figures for cars and two-wheelers suggest it is an inventory jack-up rather than actual sales.
"June is 18–20% lower than May sales. Dispatches that happen over that will add to the already high dealer inventory level."
Watch The Full Conversation Here:
The views and opinions expressed by the investment advisers on NDTV Profit are of their own and not of NDTV Profit. NDTV Profit advises users to consult with their own financial or investment adviser before taking any investment decision.
-
Talking Points This Week: Tech Nerves, FII Buying, And A Faraway Banking Shock
The global markets are not shining this Diwali. The exception in the large markets is, India.
-
Midterm Rally Lasted A Day. The Hard Reality Of A Divided US May Last Two Years | Opinion
Between a contested AI boom, a debt ceiling that arrives in 2027 and a president with every incentive to act alone, the next two years may prove more volatile than the first day's rally suggests.
-
Blue Wave Will Derail the AI Trade but Won't Dismantle the AI Era | Unhedged Position
The Democrats' sweep of the US Congress will see politics collide with economic forces both over the long and short term.
-
It's Time To Take The GST Council's Bet On Trust Global
Payment records can prove India's services exports, and clear, proportionate rules can bring foreign digital sellers into the tax net.
-
Opinion | India at 38: From Innovation Overperformer to Innovation Powerhouse
India now has 453 VC-backed deep science startups, 18 of them late-stage, after 117 percent growth since 2020. Laurus Labs, at USD 9.3 billion, is the most valuable deep science company in any middle-income economy outside China.
-
Navigating Energy Crossroads: S Jaishankar's Call For Diversified Supply Chains At G20 Ministerial Meeting
As geopolitical fault lines continue to test maritime trade routes and commodity flows, Jaishankar's message remains pertinent: true economic resilience requires open markets, protected transit lines, and a genuine commitment to multilateral cooperation rather than coercion.
-
Indians Are Travelling, But Not Every Journey Is A Holiday | The Week In Whys
Pilgrims, patients and working women are the real travellers, and the system hasn't quite caught up with them.
-
Getting To Work Costs Women More | The Reason Why
It is not just about women paying more than men. It is about women paying much more in cities than in villages.
-
AI Bias In Investing Cannot Be Eliminated, But It Can Be Governed
Framing is a particularly important example as identical financial information presented in terms of gains rather than losses can lead an LLM to reach a different assessment.
