After suffering the ignominy of being the whipping boys for the past four months, software stocks staged a strong turnaround at the bourses yesterday. Unlike in the past, when software rallies have been deceptive, yesterday's rally was spread across majority of the stocks.
On the other hand, cyclicals which were ruling the roost so far, witnessed some profit-booking, which will only intensify in the days to come.
The reasoning is simple. For one, most of the cyclical stocks have appreciated considerably in the past three months. From now on, it could be more of a return in percentage terms with even a 40 per cent return looking to be a remote possibility, at least for the time being. Also, the first-quarter figures of the most of these stocks are unlikely to throw up any major surprises.
In comparison, valuation-wise, software stocks do look appealing. Also, no other sector can claim to give the give the kind of returns that software stocks generate, even when they are out of demand.
With software already having set the ball rolling, will pharma and FMCG be the next to follow suit?
Revenge of Uncle Sam
The runaway prices of Infosys Technologies could have caused some heartburn to Uncle Sam who was an aggressive seller at Rs 3,500. Having lost out on Infosys, Uncle Sam could be keen to make up for it at some other counter.
With software scrips back in the reckoning, in all probability, Uncle Sam could make an entry into one of the software scrips in a big way in the coming days. Which one will it be?
On cloud nine
Buoyed by possibility of a stock split, punters ramped up the stock price of Zee Telefilms yesterday to a new all-time high during intra-day trading.
This apart, the effects of the restructuring process undertake
