Sensex spurts as TCS hastens risk-on with earning season

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TCS unleashes rally in IT counters while small cap gallops

By S Jha

New Delhi, July 12: Sensex on Friday zoomed 622 points on the back of a major rally in the IT stocks. The IT behemoth TCS vaulted by almost six per cent to unleash a furious rally in the IT stocks.

Nifty posted a gain of 186 points to give a close above 24500. The bulls had been eyeing the 50-share index to clear the congestion zone of 24250-350 for a while.

Bank Nifty remained a laggard on Friday. The banking index gave up the gains from the positive cues of the US retail inflation number coming lower than the street expectation.

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Unlike the last three Fridays, the indices remained firm across the time span of the trading day. There was no looking back for the IT scrips.

On the back of above expectation numbers and the subsequent brokerages upgrades, the TCS shares kept soaring to almost touch the level of ₹4200 during the day. The cash cow from the Tata stable is now a kiss away from an all-time high of ₹4260.

After the market hours, HCL Technology also announced above expectation numbers in the first quarter result. The Noida-based IT firm has shown expansion on all counts – profits, revenue, and margins.

Taking cues from TCS, the small cap IT firms were rallying fast on Friday. Sonata Software zoomed over 10 per cent.

KPI Technology and Birla Soft, twins from the same stable, made strong gains. Shares of Pune-based Persistent Systems was higher by six per cent.

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The IT index post gains of over four per cent on Friday. Such a major expansion in a single day in the IT sector has not been seen for several months.

Large cap IT firms had been laggards on the street. Even the mid cap IT firms have lagged almost all the sectors in the last 24 months. The small cap IT firm had been exception with the likes of Newgen Software rewarding investors with strong gains in its share prices.

The gains in the IT counter also shrugged off the sideways to negative movement in the indices ahead of the Union Budget unveiling on July 23. Amid speculations of a rejig in capital gains tax, the bourses had been getting jittery.

Disclaimer: This article makes no recommendation for buy or sell of shares of any company.

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