The results preview of later this week and next have begun its own independent trading cycle in the mainline IT scrips and a completely independent run of sharp calls on Mid Cap IT
As investors in IT scrips still make for a substantial body of “active” investors in India, thos phenomenon could remain a striving juggernaut even as It ‘s contribution to GDP is darfed by banks and financial service now and maybe education, Healthcare and Welfare in a decade.
Infracos have also come in to separately run a trading cycle to moderate the impact of IT runs as were prominent in 2000, 2005 and even 2009 after the first handovers at Infosys
The current week’s machinations mean though that the Rupee’s new strength that is unlikely to trun back will temper IT’s extraordinary September results again and more targets will go out of the window making negating DIIs who just did not quit on their Infosys portfolios at risk to redemption runs but that is an unlikely event
Preview week began with a sharp cut on Nifty enabling unnerving HCLTech and Infy cuts to go through without a whimper and thus a heavier correction is likely to 2450 for Infy and probably 532 for HCLT before a fresh call on the sector prospects is timed with Infy September results . Bank credit policy comes out in the last qeek of October and I am not sure how Banks will play the “unbothered” card with results date as they have already been bothered by passing around published press releases once in the last 5 years and the calendar remanins a mythical Olympus/Unicorn or another Hellenic / Scottish tale of bed bugs
That means that the body of investors has to to be extra carefull in reaping profits from IT’s last mega performance ont he back of the Rupee making more plus plays in this week in mid cap IT likely. Suddnly Mindtree looks overstretched again and KPIT is no tin play though RJ’s Geometric is.