Infosys results aid tech funds to reach top slot

The rally in information technology shares following the impressive January-March earnings of Infosys Technologies lifted the returns of technology funds.

IT funds topped the returns chart with 5.15 per cent average returns. In comparison, the category had registered negative 1.02 per cent average return for week to April 5.

However, last week technology funds could not beat the BSE IT Index and the CNX IT Index which rose 5.19 per cent and 5.21 per cent, respectively.

All equity funds gave positive average returns last week. Fast-moving consumer goods funds recorded least return in equity funds category.

However, none of the sector fund categories could beat their respective benchmark indices.

On the debt side, the fall in yields of long-term bonds amid easing inter-bank liquidity helped long-term schemes to show improved performance last week.

On Friday, software major Infosys reported a nearly 70 per cent jump in its Jan-Mar net to Rs 1,144 crore, which was higher than analysts' estimate of Rs 1,030 crore.

The higher-than-expected earnings lifted Infosys shares 2 per cent on Friday and set momentum for other IT shares which rose 5-8 per cent.

Over the week, shares of Infosys, Satyam Computer Services, and Tata Consultancy Services rose 4.7per cent, 5.7 per cent and 5.7 per cent, respectively. This in turn improved the net asset values of technology funds.

Among seven technology funds, ICICI Prudential Technology Fund emerged the best performer with 6.35% return followed by UTI Software Fund and Birla Sun Life New Millennium Fund.

Satyam, TCS, and Infosys featured among the top five holdings of UTI Mutual and Birla Mutual's software fund, while TCS was among the top five of ICICI Prudential Technology Fund. Fund managers continue to be upbeat on the software sector and expect 22-25 per cent earnings growth next year.