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Thread: IT Sector Revisited

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#18 (permalink)

9th June 2008, 12:16 AM

pkapadia

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Likely to be a short-lived rally

With US $ taking a severe beating on a/c of bad unemployment data, US spec money went to gold and oil which surged to all-time high of $139. In India, inflation worries, political unstability and current account deficit is likely to result in tightening monetary conditions by RBI and lower GDP growth (could be below 8%) now.

So while IT and Healthcare sectors performed valiantly recently on depreciating rupee, I believe this to be a short term phenomenon. US is in a recession (no matter how you slice and twist it) and that is bound to affect the profitability of IT sector. Already the average salary hike has come to single digit figures. And a slowdown in IT is evident in Real Estate too.

One silver lining could be that US efforts to work its way thru the credit crunch etc. may start paying off by September 2008. Let us see which way the ball bounces till then..

Paresh

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