The recent market decline is largely induced and pharmaceutical shares. Together, these sectors represent ~ 15% of the wider Indian market. The IT Index came under time pressure from the increasing cost of H-1B visa and the recent suppression of Accenture, while the fresh 100% American tariffs on pharmaceutile products have caused heavy sales in this industry. Medium and small capital supplies fell steeper than large caps, which reflected the valuing pressures.
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Increased Visa fees of $ 100,000 in the US are expected to be influenced by Indian IT companies in the short term, which will move towards the increased local hiring, subcontractors and at sea. Larger companies have a better position to absorb these costs, while medium -level companies depend on new visas can face pressures and potential delay in the project. This change could speed up IT investment in global capabilities (GCCS), automation, AI and geographical diversification to EMEA and APAC regions. Given the inherent IT of the IT business model, the long -term impact could change positive, supported by higher off workplaces, Offshore and Passprorough. This is a favorable opportunity for long -term investors to accumulate positions in this industry.
The proposed 100% American tariffs on branded and patented pharmaceutical products are expected to affect production facilities in South Korea, the UK, Ireland and Switzerland, although the country with US trade agreements such as the United Kingdom, EU and Japan are freed.
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As a result, the Indian pharmaceutical sector has an impact on how business discussions continue. While standard generics – support of Indian exports – affect largely unaffected, newer products such as complex generations and biosimilars, they may face risks depending on their production sites. Indian CDMOs could lose competitiveness if they don’t have American devices. However, the agreement concluded by Pfizer with the US government on providing discounted branded products focused on its website has temporarily reduced pressure; More such trades are expected, which could reduce the risk of price control. Overall, the domestic impact is limited because about 90% of the US market is generics, the force for the Indian pharmacy, with several companies already expanding or planning production
Despite the positive outlook of the domestic economy of the RBI, FY26 GDP increases to 6.8%. With regard to global headwinds and geopolitical uncertainties, a balanced investment portfolio is recommended, with 70% assigned shares, 25% on bonds or debt tools and 5% for gold.
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Due to the drastic increase in international gold prices, we reduced weight from 10% to 5%. The shares are expected to remain hovering in the medium term, supported by fiscal policies, and in anticipation of a reduction in future business risk. However, current trends in capital are alleviated by global challenges, a slight increase in earnings, increased award and FII.
FII’s outflows were a key factor for India’s insufficient performance compared to global markets. Meanwhile, the latest interest rates by 25-basis reduce the US federal reserve system and the expectations of additional cuts during the year are likely to weaken the dollar and strengthen the influx of FII to developing markets such as India. While immediate advantages can be limited, this step strengthens sentiment and relieves the risk of disadvantages.
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Second, Indian shares are likely to benefit from a drastic decrease in the emerging market premiums. The growth of earnings, although it is expected that earnings in the fourth quarter will be slightly positive, the results of Q3 could mean the beginning of a stronger growth trajectory driven by fiscal and RBI financial stimulus. These factors are expected to affect the potential reversal in the FII.
Over the next 12-24 months, domestic investment topics are ready to provide stable revenues that are powered by reforms such as tax cuts, lower GST rates, inflation alleviation and potential reduction in rates. These measures are expected to increase one -off income and consumption and benefit sectors such as cars, consumer duration, real estate and FMCG. The infrastructure also remains a promising topic supported by Capex and modernization efforts, while developing industries such as data centers and green energy offer other opportunities. Despite the current challenges, the IT sector offers contradictory games for long -term and high -risk short -term investors, especially as further cuts in rates take place.
The author, Vinod Nair, is the head of Geoji Financial Services.
Renunciation of responsibility: This story is only for education purposes. The above opinions and recommendations are the opinions of individual analysts or brokerage companies, not mint. We recommend investors to check with certified experts before making any investment decisions.
(Tagstotranslate) IT Stocks
