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Stocks of major information technology companies are seen in a narrow range next week, in the absence of any sector-specific domestic or global triggers. The European leaders could not arrive at a consensus over giving the next tranche of aid to Greece but expectations are that, the same will be provided next week. With the results season behind us, focus over the next three to four weeks will shift to the reforms measures in India and the fiscal cliff issue in US. If some of the proposed bills are taken up and passed, we can see the sentiment turn bullish and markets trending higher over the next few weeks. Fiscal cliff refers to a set of tax hikes and spending cuts that will automatically come into effect in January if the US Congress is unable to reach a compromise on debt negotiations. Infosys' commentary on demand environment continues to be a tad contrasting to its industry peers. The company continues to see the demand environment as challenging across most verticals and geographies, even as there are pockets of optimism.
The company is seeing pick-up in request for proposal activities, though the conversion rate remains slow. The domestic market is witnessing a time-wise correction for the last nine weeks and this could be the reason behind the fluctuation in stock prices of all major companies. While the outlook on Infosys is bullish, that on Tata Consultancy Services remains neutral.
