Is the current rally in software stocks for real? Or are speculators setting up a trap to get gullible investors in before the results by Infosys on Wednesday?
A section of the market is debating this since frontline technology shares have been on an upswing on the face of an expectedly bad quarterly performance by software firms.
And on Monday, IT stocks, along with PSUs, helped BSE sensex rally to a new high at 15,085 which closed just a tad off that mark, at 15,045, both new record levels.
The day's gain for the sensex was 81 points, or 0.55%. The day's rally added about Rs 40,000 crore to investors' wealth with BSE's market capitalisation now at Rs 43.7 lakh crore.
Although the index had touched the 15K mark in intra-day trade on Friday, Monday was the first time it finished above that mark. TCS ended 1.5% higher at Rs 1,176, while Wipro and Infosys both closed 1.1% up, at Rs 525 and Rs 1,993, respectively.
These stocks could face huge selling in case Infosys revises its guidance downward, said an analyst. The sudden rise in IT stocks, despite the strength of the rupee against the dollar and the all-round expectations of a de-growth in April-June profits, is surprising.
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