The Hindu Business Line : Techs keep Sensex in positive zone

THE firming up of prices in the technology sector, specially frontline stocks helped keep the BSE Sensex in the positive territory. The BSE Sensex appreciated by 10.33 points to close the week at 3510.90 points. The trigger for the technology stock rally was the announcement of the management guidance by Infosys Technologies.

For the analyst community and market observers who were speculating on the revenue guidance of 15-20 per cent for 2002-03, there were hardly any surprises in store. Infosys announced that its revenues would grow at 18-22 per cent and the per share earnings at 16-20 per cent for 2002-03. Even though Infosys indicated that the technology spending was likely to be flat in 2002, decision cycles remained elongated and client ramp up was slow, the firm guidance from Infosys proved to be good enough for the market players to spark a rally. Secondly, the fourth quarter and full year performance were in line with market expectations. Some of the second rung stocks such as Mastek, Hinduja TMT and MphasiS BFL soared on good performance and a healthy revenue guidance for the future in some cases.

Among the other gainers were Digital GlobalSoft and VisualSoft Technologies, KLG Systel, Kale Consultants, Polaris Software, SSI, Infotech Enterprises, NIIT and Aftek Infosys.

Among non-technology stocks, the major gainers during the week were Tata Engineering, Ashok Leyland, Tata Steel, IPCL, Shipping Corporation of India and Dr. Reddy's Laboratories. As the Supreme Court ordered the introduction of the CNG buses in Delhi, both the HCV / LCV majors, Tata Engineering and Ashok Leyland rallied during the week.

The Tata Engineering stock was also buoyant on account of the strong sales of the Indica car and the general domestic sales for the March quarter. The IPCL stock remained active on disinvestments hopes and the withdrawal of a major excise claim against the company. The Tata Steel stock appreciated last week on the back of a technical agreement signed with the two international steel majors - Arcelor and Nippon Steel Corporation for the manfacture of high quality steel sheets for the automobile industry.

After witnessing a bull run for the past few months, the PSU stocks lacked lustre during the week as some profit booking opportunities began to emerge in stocks such as GAIL, Engineers India, Neyveli Lignite and Hindustan Zinc However, some of the high profile petroleum stocks continued to gain value.

International markets: The jitters over the performance of technology majors such as Cisco, IBM and Intel reverberated across the market, with both Dow and Nasdaq ending the week 0.8 per cent down at 10190.82 and 1756.19 points. The US markets were also bracing up for the earnings season which is expected to be a rough one, with a few nasty surprises along the way. Specially, any bad news from the technology sector is leading to the stocks getting pummelled mercilessly. The Dow and the Nasdaq closed lower for the fourth and fifth successive week in the run-up to the earnings season.

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