Bullish outlook: IT, pharma stocks expected to hog limelight in 2014
- Lok Sabha elections: First phase of polling ends, Assam records 72 pc voting, Tripura 80 pc
- BJP manifesto pledges good governance, talks of constructing Ram Temple, abrogating Article 370
- Revenge remark: EC issues notice to Amit Shah
- Coal block scam: CVC Pradeep Kumar recuses himself from SC probe panel
- Elections 2014 LIVE: BJP's manifesto in tune with RSS' agenda, says CPI
Stock markets are likely to remain upbeat in 2014 after modest gains in the last year, experts say, while putting across a particularly bullish outlook for sectors like IT and pharmaceuticals.
The BSE IT index emerged as the best performer among the 13 sectoral indices, outperforming the benchmark index Sensex, in 2013. The gain of 59.52 per cent in IT sector index was way ahead of the Sensex's nearly 9 per cent rise.
Besides, the healthcare index soared higher by 22.29 per cent while FMCG sector was up 11 per cent last year.
"We expect continued out-performance from IT and pharma given the weak macro-environment. However, sectors like financials, despite asset quality concerns, and other rate-cyclicals, are likely to remain in focus, given the expectations of economic recovery and a turn in investment cycle," said Tirthankar Patnaik, Director-Institutional Research, Religare Capital Markets.
A better-than-expected US recovery may accelerate tapering process, leading to renewed pressure on all emerging market currencies, both of which augur well for IT and pharma, he said.
IT stocks rose sharply this year on the back of a better macroeconomic environment in their major market US and due to gain from rupee depreciation.
The rupee fell sharply by 12.54 per cent last year.
Technology stocks were beaten down during 2012, mainly on account of Euro zone crisis.
"IT sector has outperformed in 2013, leaving behind other sectors by greater difference. The key reason has been strengthening of dollar, which improved the profit margins, and also improving demand in global markets. So, we expect IT sector will perform well in 2014 as well, as the trend is expected to continue," said Nidhi Saraswat, Senior Research Analyst, Bonanza Portfolio.
- Ukraine says Russia fomenting eastern unrest
- Liquor worth Rs 4.85 cr seized in MP ahead of LS polls
- Man held with foreign currency worth Rs 38 lakh at airport
- Candidates steering towards auto unions to rev up support
- ‘Will send builders of illegal structures to jail’
- To root out corruption, vote for change and give the new face a chance, says Bains