The Hindu Business Line : IT stocks weather the storm

In a backdrop marked by a severe paring of market capitalisation, infotech stocks bucked the trend, with the CNX IT index conspicuously ending positive when all other benchmarks fell behind their opening marks. The index close 0.96 per cent higher at 4,882.9 points, up from its previous close of 8,836.45 points. The trend can be attributed to gains recorded by some of the leading IT counters – Infosys, Satyam and TCS.

The last-named powered ahead by nearly 2.5 per cent to close at Rs 1,094.70. Heavyweights Infosys and Satyam advanced by 1 per cent each, ending at Rs 1,890.30 and Rs 456.50 respectively.

The gains negated the losses registered by a number of smaller IT stocks, including HCL Infosystems and Moser Baer. HCL Infosystems fell by a whopping 6.3 per cent (or Rs 14.75) to close at Rs 220.20 after recovering from the day’s low of Rs 188. Moser Baer for its part dropped by 4.8 per cent.

Some of the other losers (each of which is part of the IT index) were CMC, Tech Mahindra and Hexaware. Each of these dipped by over 1 per cent on NSE.

Market circles mostly see the trend as a one-off development, a true exception when all the other key segments have moved the other way.

Mr Rajan Krishnan, who heads Principal MF’s business in India, however, noted that it is rarely possible for investors to stay prepared for such special occasions. For those tracking exchange-traded funds, that is, a fund mirroring the IT index, could have recorded gains during the day, considering the inherent features of such products.

According to brokers, they viewed the SEBI note as positive for IT companies as that could mitigate rupee appreciation. Besides, foreign institutional investors’ did not have strong exposure to IT stocks and hence the faced almost nil unwinding in F&O segment, say market observers.

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