The decline in individual stocks is higher.
Infosys, for instance, has declined 19 per cent, Wipro 16 per cent and HCL Technologies 12 per cent.
Pharma heavyweights, too, have seen a sharp fall -- Sun Pharma is down 5.3 per cent, Dr Reddy’s 19 per cent and GSK Pharma 18 per cent.
Given the sharp fall in heavyweights is due to the re-balancing of foreign institutional investment portfolios, not fundamental reasons, equity strategists believe this could be a good time to enter these stocks.
The rupee’s six per cent rise through the last six months is a headwind for both these export-oriented sectors; both are expected to witness robust growth; the growth in sales might compensate for the decline in earnings.
Edelweiss Securities does not expect the IT sector’s trading multiples to decline, as these are currently close to the historic lows of the post-Lehman crisis; currently, demand is on a strong footing.
The brokerage expects the robust domestic demand to bolster headline numbers.
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