Financial Daily from THE HINDU group of publications
Saturday, Nov 29, 2003
Financial Daily from THE HINDU group of publications Saturday, Nov 29, 2003 |
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Markets
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Stock Markets Info-Tech - Stocks IT stocks rise on good US economy numbers Our Bureau
Mumbai , Nov. 28 WITH US economy showing signs of recovery, infotech stocks have turned fancy in the Indian stock market. The reflection of the US recovery was seen in today's trading with buying seen in several IT stocks. Some of the IT stocks that were bought in today's trading included Hughes Software, Wipro and i-flex Solutions. Analysts said strengthening of US economy is good news for the Indian software industry, which generates 70 per cent of its revenues from that country. They said a break-up of the US GDP estimate shows an uptick in technology spends, which is another positive indicator. The preliminary estimates of US GDP growth for third quarter was 7.2 per cent, the fastest growth in the last 19 years. Apart from this, analysts said in the second quarter both onshore and offshore billing rates have grown sequentially, after steep declines in the preceding quarters. "All these indicators are positive for the Indian IT industry and these are now visible on the stock price of the various software companies," said an analyst with a domestic broking firm. He said after the March 2003 quarter, IT stocks were sold heavily, much more than their value, and now with up trend in the sector, buying in these stocks is back. But some analysts said the buying is mainly seen in the second rung companies as their business and margins have not suffered over the last couple of quarter. This is seen from most of the institutional buying seen in stocks such as Hughes Software, which closed at Rs 491.30 (up 4 per cent) today on the BSE. Igate Global closed at Rs 272.75 (up 3.52 per cent). Brokers and analysts said top rung companies such as Infosys and Wipro would also perform well in the coming quarters, but the small and medium sized companies are expected to grow faster due to their niche markets. The heavy recruitment and increase in salaries in the sector are also indicators for the uptrend in the sector.
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