The worst seems to be over for India's information technology stocks, according to Andrew Holland, who manages one of India’s largest long-short hedge funds.
The Nifty IT Index has risen 9.67 percent so far this year, compared to the 2.82 percent drop in the NSE Nifty 50 Index. “A weaker rupee will give further fillip to the tech stocks,” the chief executive officer of Avendus Cap Alt Strategies told BloombergQuint.
Holland gives two reasons why he thinks the local currency will depreciate to 66-67 against the dollar.
- First, the dollar is expected to get stronger on possibilities of a 'trade war' playing out between the U.S., Europe and China over the next few weeks.
- Second, India's Goods and Services Tax collections have not increased to expected levels, putting pressure on the country's already revised fiscal deficit.
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