Techs back in vogue

Investors seem to be rediscovering the IT counters post the Union Budget. The BSE IT index, which had not moved an inch for the last 40 days even as the BSE Sensex gained around 14 per cent, outperformed the bellwether index by 50 per cent on Wednesday.

While the Sensex surged two per cent, the IT index zoomed three per cent, prompted by gains in mid-cap IT stocks such as i-flex, MphasiS and Satyam.

"I think it is money coming back from the other sectors," said P Phani Sekhar of Angel Broking.

The top gainer on Wednesday was Polaris Software, which moved up a hefty 10.7 per cent to close at Rs 120.9 (Rs 109). i-flex (up 5.15 per cent), Satyam (4.16 per cent) and MphasiS (3.52 per cent) also gained significantly.

Most of the gains were made by the mid- and small-cap IT stocks. None of the 11 scrips that make up the IT index moved up on Wednesday.

"Now that the budget is over, the markets are taking a re-look at their valuations," Sekhar points out.

"Adding fuel to the rally on Wednesday was the expectation that US President George Bush's visit may see an announcement of a relaxation in the number of visas granted to foreign workers entering that country.

"This will see a further rally in these counters. Investors may have been trying to anticipate that on Wednesday," another analyst said.