The information technology (IT) sector continues to see demand uncertainty and there are no clear signs of recovery, according to JPMorgan.
Ankur Rudra pointed out that the sector has underperformed on a 2-3 years basis. But he is optimistic on it from a medium-to-long-term perspective as the recession in tech spending typically does not last too long.
Rudra prefers companies with good growth, a healthy dividend, and buyback yield.
“A pressure point on the industry tends to be insourcing and that is driving the pressure on the sector,” he noted.
According to him, the US Presidential elections have been a source of uncertainty which is adding to continued softness this year. The uncertainty on interest rates has also weighed on the sector with a lot of companies using that as an excuse to not spend.
Also Read: HSBC Asia strategist on why foreign investors will buy Indian stocks despite high valuations
“If any of these two events, if not both, play over the next 12 months, it can help the sector,” Rudra added.
For more details, watch the accompanying video
Catch all the latest updates from the stock market here
Ankur Rudra pointed out that the sector has underperformed on a 2-3 years basis. But he is optimistic on it from a medium-to-long-term perspective as the recession in tech spending typically does not last too long.
Rudra prefers companies with good growth, a healthy dividend, and buyback yield.
“A pressure point on the industry tends to be insourcing and that is driving the pressure on the sector,” he noted.
According to him, the US Presidential elections have been a source of uncertainty which is adding to continued softness this year. The uncertainty on interest rates has also weighed on the sector with a lot of companies using that as an excuse to not spend.
Also Read: HSBC Asia strategist on why foreign investors will buy Indian stocks despite high valuations
“If any of these two events, if not both, play over the next 12 months, it can help the sector,” Rudra added.
For more details, watch the accompanying video
Catch all the latest updates from the stock market here
(Edited by : Shweta Mungre)
First Published: Jun 12, 2024 4:14 PM IST
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