The Hindu Business Line : IT stocks gain sharply on active purchases

INFORMATION Technology stocks gained sharply on Monday on the back of active purchases both from domestic and foreign investors as the sector is relatively insulated from the various economic policies, brokers and analysts said.

The recent depreciation of the rupee against US dollar has also brought interest of the investors towards IT stocks.

On a day when BSE Sensex gained 3.26 per cent, the exchange's IT index gained 8.03 per cent.

Major stocks to gain today included Wipro (up 6.62 per cent at Rs 1609.40 on BSE), Infosys Technologies (up 8.46 per cent at Rs 5319.20), Satyam Computers (up 8.31 per cent at Rs 328.30), HCL Technologies (up 10.73 per cent at Rs 341.05), I-Flex Solutions (up 9.11 per cent at Rs 526.85).

HSBC Securities and Capital Market said IT services is relatively safe in the current environment, as the sector is relatively insulated from key domestic issues such as political instability, uncertainty on economic policies of new government on key issues like disinvestments and anticipated rebound in domestic interest rates. The firm said, ``We are, therefore, increasing our medium-term stance on the sector to neutral, from our underweight stance earlier".

Mr Gaurav Dua, Senior Analyst, Anagram Stock Broking said: ``Part of the money pumped in battered sectors like PSUs, banking and power is being partly shifted to technology sector as the sector is insulated from the vagaries of the economic situation in the country.''

Another factor for the focus on IT sector is the deprecation of rupee against US dollar. Earlier, most of the market players had turned bearish on the sector due to the appreciating rupee. Since the beginning of April, rupee has depreciated 3.5 per cent against US dollar.

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