IT stocks stage a comeback

MUMBAI, MAR 15: Indian technology stocks and cyclicals glittered amid subdued regional equity markets on Wednesday on bargain purchases by...

MUMBAI, MAR 15: Indian technology stocks and cyclicals glittered amid subdued regional equity markets on Wednesday on bargain purchases by institutions and speculators. A sharp uptrend in counters like HLL, Reliance and IT pivotals helped Sensex to record a smart rally of 73 points.

Software stocks opened weak, battered by sharp overnight losses on the Nasdaq, but reversed course as fresh position building at the start of a new account on the NSE fuelled a rally. "The rebound in sofware shares led the rally. Many domestic funds and information technology dedicated mutual funds bought into the sector," said a dealer. But whether the rally has enough steam left to move ahead will depend on the Nasdaq’s movements and on the performance of Indian firms listed there, some dealers said.

Reflecting the uptrend, Sensex opened on a weak note at 5067.42 points — from the previous close of 5175.55 points — surpassed the 5300 mark, touched the day’s high of 5339.94 points and then fell sharply by touching the day’s low of 5045.99 points before closing higher at 5249.76 points, showing a net gain of 74.21 point over the previous close.

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Nasdaq Composite Index, the indicator for tech stocks, had fallen by 200 points on Tuesday. Other Asian markets, including Tokyo and Hong Kong, were subdued following the crash in the US market.

Leading gainers among software shares which ended eight per cent higher on the upper circuit were Hughes Software at Rs 2,664.35, Aptech at Rs 2,049.75, Polaris Software at Rs 1,980.90 and DSQ Software at Rs 2,327.35. Other big gainers were Visualsoft Technologies, up Rs 650 at Rs 8,850, Satyam Computer Services Rs 282.15 at 5,650 and SSI Ltd Rs 270 at Rs 5,170.

Software leader Infosys Technologies ended Rs 195.65 lower at 9,707.30 but off its low of Rs 9,110.75. The comeback by technology stocks put cyclicals into the shade but some economy-related shares ended higher on fund buying.

Petrochemicals firm Reliance Industries rose forthe second straight day and closed eight per cent or Rs 17.55 higher at Rs 237.25. The stock has recovered from this year’s low of Rs 199 touched on March 14. Index heavyweight consumer goods company Hindustan Lever ended Rs 168 up at Rs 2,890.

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Lubricants maker Castrol India closed eight per cent higher at Rs 361.50, buoyed by BP Amoco Pls’s tkeover of Castrol’s parent Burmah Castrol Plc. But pharmaceutical stocks snapped a two-day rally and endedweaker. Ranbaxy Laboratories ended Rs 11.80 lower at Rs 675, Aurobindo Pharma Rs 41 at Rs 491, Glaxo Rs 31.60 at 490 and Novartis Rs 43 at Rs 890. Dr Reddy’s Laboratories bucked the trend, rising Rs 40.45 to Rs 1,547.

Preliminary BSE data showed the market breadth to be positive with 957 issues advancing, 853 declining and 153 unchanged. Total traded volume was lower at 74.65 million shares compared to 79.50 million on Tuesday.