At 09:41 am, the Nifty IT index, the top gainer among sectoral indices, was up 2.9 per cent, as compared to a 0.71 per cent rise in the Nifty50 index. The IT index had corrected 8 per cent from its record high level of 22,619 points touched on October 13, 2020 on valuation concerns, against 1 per cent decline in the benchmark index during the same period till Tuesday.
“Biden has indicated raising corporate taxes and capital gains tax if voted to power. This has seen investors book profit ahead of the outcome in the US and the money will look at other geographies, including EM. US Federal Reserve (US Fed) on its part is likely to keep the monetary policy accommodative and more stimulus is expected, which again will benefit EM. On the other hand, a Donald Trump
win will see US dollar strengthen and could also be negative for world trade given his earlier stance on China,” said Jyotivardhan Jaipuria, founder Valentis Advisors. CLICK HERE FOR FULL REPORT
However, foreign brokerage firm, Credit Suisse has announced major changes
to its sectoral preferences. The brokerage has gone neutral on IT, from a strong overweight (OW), citing high valuations and a relatively muted growth forecast. “After a 37 per cent bounce, the relative price-to-earnings (P/E) is now the highest since 2013, and the gains going forward are likely to be growth-dependent, which appears unlikely to break out of the 10-12 per cent range,” said Credit Suisse strategists, led by Neelkanth Mishra, in a note.