Mumbai, May 9
IT stocks led by Infosys Technologies were among the major gainers after the software firm announced that its second sponsored American Depositary Shares (ADS) will open from today.
Buying in top IT companies was on expectation that other IT companies that are listed on the US stock exchanges would announce similar plans soon.
In a sponsored ADS, local shareholders can offer their shares to international investors thus giving local investors an arbitrage opportunity. Since the ADS command a premium over local shares, there is keen demand in the domestic market for these shares.
"Infosys ADS have a good premium so investors want to buy them in local market to offer them to international investors," said a dealer.
Some of the IT companies listed on US markets are Satyam Computer and Wipro. There is also market talk that other IT companies may be listed on the US bourses through sponsored ADS.
Satyam Computer has also announced plans to launch sponsored ADS. There is buzz that Wipro may announce similar plans.
In today's trading, the BSE IT Index gained sharply by 2.65 per cent compared with 1.45 per cent of BSE Sensex. The IT index gained the most among all the sectoral indices on the BSE.
Infosys Technologies, which is also listed on the Nasdaq, led the rise in the IT Index. The stock gained 3.74 per cent at Rs 2096.85 on the BSE. Wipro, listed on the New York Stock Exchange, gained 1.55 per cent at Rs 646.85. Satyam Computer, also a NYSE-listed company, moved up 2.96 per cent at Rs 425.80.
Other stocks in the gainers' list were TCS at Rs 1,172.40 (up 0.46 per cent) and MphasiS BFL at Rs 246.85 (up 4.91 per cent).
Brokers the there is sudden expectation in the market that more IT companies would announce sponsored ADS or come out with ADS.