IT Index gives Breakout, Turns out to be the Best Bets
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IT stocks had been all time favorite investment area for many investors for a long time at it had the potential to yield high returns.
In February 2009, the Index was trading at approximately 2000 level. Till December 2010, it had rallied almost 275 per cent to trade at 7500 level. In 2011, the Index corrected and slipped by almost 33 per cent to 5000 level. Then again, in March 2015, the Index pulled itself together and rallied 150 per cent to make the high of 12800. Thereafter, the correction followed again, bringing the Index down to the low of 9300, declining 27 per cent in November 2016.
The recent correction has been due to two main reasons, slowing growth and the election of Donald Trump as US President. Most IT companies have reduced their revenue guidance for the upcoming quarter. The sector sunk further into uncertainty as the Republican candidate Donald Trump was elected as the new president of the US. The country accounts for around 60% of India’s software exports. During his campaign, Trump had constantly spoken against IT outsourcing and immigration. He even talked about Indian companies such as Tata Consultancy Services (TCS) and HCL Technologies. Trump is supposed to began his reign from 20th January and the scenario for the Index will get a clearer picture then.
However, today, the It Index gave the breakout of three week high of 10110 with the next target of 10448. This makes the space attractive for the investors and hence it is suggested to keep an eye on this Index which can be a wealth creator in coming days.
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