IT stocks lead 593 point surge in Sensex

A strong surge in information technology (IT) stocks, which had taken a hit due to the strengthening rupee, saw the key benchmark stock indices close above 18,000, ending its four-day losing streak.

The IT index of the 30-share Bombay Stock Exchange (BSE) was the top gainer (5.77 per cent) among sectoral indices. While the BSE Sensex rose by 3.36 per cent, or 593.87 points, to close at 18,242, the broader 50-share index CNX S&P Nifty of the National Stock Exchange (NSE) too gained 3.50 per cent, or 179 points, to close at 5,317.

Among the Asian markets, Hang Seng was up 2.85 per cent. Taiwan Weighted gained 2.03 per cent and Seoul Composite advanced 0.61 per cent. Nikkei, however, was down 0.70 per cent and Shanghai Composite 1.43 per cent.

Explaining the buying interest in IT stocks, market players said most IT stocks were available at a price-to-earnings ratio that is lower than that of the Sensex.

Anita Gandhi, head of institutional business at Arihant Capital, said: "The recent move by IT companies to curb expenses has gone down well with investors. Moreover, the rupee too seems to be stabilising at the current levels. Both these factors plus the fact that stocks were highly undervalued are attracting investor attention."

Satyam Computers was the top gainer among index pivotals. The stock rose 8.18 per cent and was last traded at Rs 421. Infosys Technologies rose 5.80 per cent to Rs 1,591. Wipro was up 5.79 per cent at Rs 437 and TCS gained 6.17 per cent at Rs 992.

Some of the other top gainers, including Tata Steel, Tata Motors, Hindalco Industries, ONGC and HDFC, gained 5 to 6 per cent.