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Trump’s swearing-in today: IT and pharma may feel the heat

Cautious sentiment in the market, coupled with talk of pricing pressure on pharma, and new H1B norms for IT companies could affect these stocks, said analysts.

, ET Bureau|
Updated: Jan 20, 2017, 08.29 AM IST
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However, some analysts expect TCS to rise up to Rs 2,340 after which it could see some selling.
However, some analysts expect TCS to rise up to Rs 2,340 after which it could see some selling.
Mumbai: Stocks of IT and pharma companies could see some pressure on Friday ahead of Donald Trump's swearing-in as US President. Cautious sentiment in the market, coupled with talk of pricing pressure on pharma, and new H1B norms for IT companies could affect these stocks, said analysts.

TCS:

Despite growth avenues in financial services and retail, analysts said the change in management could add to the pain. “The stock may see more selling pressure on Friday but will find support at `2,155,“ said Chandan Taparia, derivative & technical analyst, Anand Rathi Securities. However, some analysts expect TCS to rise up to Rs 2,340 after which it could see some selling.

Infosys:

“There could be between 160 bps and 300 bps fall in the company's margins if the regulation is applied to existing employees,“ said Ashish Maurya, research associate at Cholamandalam Securities. The stock would find support at Rs 920, said analysts.

HCL Technologies:

The company has already employed a higher number of Americans as compared to peers. Its earnings per share will see a smaller impact if H1B norms are extended to existing employees. “It has the potential to outperform the sector. We see a 10-20% up move in the coming weeks,“ said Taparia of Anand Rathi.

Dr Reddy's Laboratories:

Analysts expect a further decline of up to 5% in the stock with support at `2,870.“We recommend buying on dips as the current valuation and niche area expertise is promising,“ said Akash Jain, VP research at Ajcon Global.

Divis Labs:

The stock has been seeing fresh selling at every bounce back and a further fall of up to 4% is expected. “Within Friday, the stock could go down to `718, while in a quarter, I see it moving towards `780,“ said Ashu Bagri, assistant VP, technical research at SBI Cap Securities.
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