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Indian tech shares stage recovery on bargain hunting
Tuesday, 15 April 2003, 19:30 IST
NEW DELHI: India's badly beaten down technology shares staged a moderate recovery in early trade on domestic bourses Tuesday, as investors resorted to bargain hunting after last week's sharp plunge.
But the benchmark share market index continued to move in the negative zone after posting losses in the last four consecutive sessions on profit taking in old economy heavyweights like Reliance Industries and Associated Cement Companies.
At noon, the market barometer 30-share Bombay Stock Exchange sensitive index or Sensex was being quoted at 2,972.71, a loss of 25.16 points or 0.84 percent from its Friday's close. The stock market was closed Monday for a national holiday.
"Institutional investors are rushing to pick up battered technology stocks. There is a lot of portfolio churning taking place in the market," said Neeraj Deewan, an analyst with Quantum Securities.
"Most blue-chip tech shares have come down to attractively lower levels after last few sessions' massive sell-off. The prevailing lower levels offer a good long-term buying opportunity for investors," Deewan told IANS.
Technology stocks, led by Infosys Technologies, India's largest listed software exporter, triggered massive sell-off on the bourses towards the end of last week's trading sessions.
Infosys was the first among blue-chip software companies to announce financial results Thursday. Most analysts and investors look to Infosys' performance as an indicator of the IT industry's health.
The company reported a net profit increase of 23 percent in its January-March quarter, but its growth outlook of 27 percent for the next year sharply impacted the stock market.
The Infosys stock lost a massive 40 percent in last two trading days on fears that earnings of blue-chip software makers would slow in the current fiscal.
The market capitalisation of Infosys dropped to 
173.33 billion on April 11, a day after it announced its results, from 267.55 billion on March 31 as a result of the large-scale selling pressure.
At noon Tuesday, the Infosys counter was trading at 2,813.00, representing a gain of 7.5 percent over its Friday's close.
The Hyderabad-based Satyam Computer bounced back 4.9 percent to 151.60 and Wipro Ltd., India's largest software company by market capitalisation, rose about 10 percent to 1,020.
Satyam Computer, India's fourth-largest software exporter, lost 19 percent in the last two trading sessions while Bangalore-based Wipro dropped 25 percent in the same period. Wipro will announce its quarterly results on Thursday.
"Investors are slowly realising the fact that it will not be possible for Indian software makers to achieve the kind of growth rate that we had seen in the past," said a broker with the Bombay Stock Exchange.
"The overall fundamental of the software companies continues to be good and the market has full faith in the potential of the industry. Today's recovery in the tech stocks at least proves this."
Source: IANS
173.33 billion on April 11, a day after it announced its results, from 267.55 billion on March 31 as a result of the large-scale selling pressure.
At noon Tuesday, the Infosys counter was trading at 2,813.00, representing a gain of 7.5 percent over its Friday's close.
The Hyderabad-based Satyam Computer bounced back 4.9 percent to 151.60 and Wipro Ltd., India's largest software company by market capitalisation, rose about 10 percent to 1,020.
Satyam Computer, India's fourth-largest software exporter, lost 19 percent in the last two trading sessions while Bangalore-based Wipro dropped 25 percent in the same period. Wipro will announce its quarterly results on Thursday.
"Investors are slowly realising the fact that it will not be possible for Indian software makers to achieve the kind of growth rate that we had seen in the past," said a broker with the Bombay Stock Exchange.
"The overall fundamental of the software companies continues to be good and the market has full faith in the potential of the industry. Today's recovery in the tech stocks at least proves this."
Source: IANS