Tech stocks rally

Tech stocks surged on Monday on huge buying support, especially from institutions.

By 13:00 IST, the BSE IT Sector Index was up by 2.17%, or 22.19 points, at 1,046.29.

All the three Sensex software stocks like Satyam Computer (up 4.11% to Rs 167), HCL Technologies (up 3.68% to Rs 140.70) and Infosys Technologies (up 1.19% to Rs 2,950.05) advanced, lifting the Sensex higher by 15.70 points to 2,982.33.

Dealers said that tech stocks have witnessed good buying support - after a battering last month following dismal results from several companies and muted guidance for the current fiscal. Between 7 April and 2 May 2003, the BSE IT Sector Index shed a massive 28%, or 395.32 points, to 1,024.10 from 1,419.42.

Dealers said the focus is mainly on mid-cap stocks in the tech sector following their attractive valuations. However, they do not rule out profit-booking at every rally.

As per market buzz, Alliance Capital was said to be active in stocks like Digital GlobalSoft. Hughes Software, NIIT, Infotech Enterprises, Wipro and Mastek also witnessed institutional buying support.

The firmness in the foreign markets has also propelled buying in tech stocks, US stocks soared last Friday, with major indexes carving out new multi-month highs, as investors looked beyond the week's mixed data in a show of confidence that corporate profits and the economy are heading towards a recovery. The Nasdaq composite index (up 30.32 points to 1502.88) and the Dow Jones industrial average (up 128.43 points to 8582.68), closed higher.

Meanwhile, there were strong inflows from foreign institutional investors since the last few sessions even as the market witnessed lacklustre activity amid thin trading volumes. Last Wednesday (30 April 2003), FIIs pumped in a net Rs 135.50 crore (Rs 1.35 billion), which was higher than the figure of Rs 116.80 crore (Rs 1.16 billion) in the previous session. FIIs, which have a significant influence on the domestic market, have put in a net $115.1 million in April 2003, their best monthly inflow since January this year. That takes their net purchases in the first four months of 2003 to $474.1 million.

Meanwhile, the non-Sensex stocks like Wipro (up 2.17% to Rs 887), Hughes Software (up 6.17% to Rs 202.90), Mastek (up 5.78% to Rs 319.20), Infotech Enterprises (up 5.16% to Rs 110.05), Mascot Systems (up 4.08% to Rs 95.65), NIIT (up 4.19% to Rs 136.70), Polaris (up 3.93% to Rs 128.35) and Digital GlobalSoft (up 3.55% to Rs 556.70) were some of the few IT stocks that firm on Monday.