Mumbai, Aug. 28: Technology shares that had been slow to hitch themselves to the recent rally today found themselves at the top of the heap on trading floors.
Their resurgence came hand in hand with a selloff in stocks that have been the darlings of investors in recent months. Market watchers put down the flagging zeal for old-economy scrips to the expiry of futures contracts, prompting operators to square off deals in shares where they have built up large derivative positions.
The sudden interest in technology confounded many. Some wondered what had changed so dramatically to push these shares up by such a sharp margin. “Industry conditions have not changed and pricing pressures continue,” said an operator. Others say they could have gained as alternatives to old-economy shares.
Among the technology big names, Wipro shot up 5 per cent to Rs 1,071.75, while Satyam Computer Services gained over 7 per cent to close at Rs 233. The other big gainers in this pack included Mastek, Polaris, Geometric Software, HCL Tech and Digital Global.
On the other hand, Tisco slumped 2.7 per cent to Rs 245.85, while State Bank of India slipped 2 per cent to Rs 444.45.
Brokers said stocks of pharmaceutical companies, usually considered a defensive pick, were among the day’s best performers, leading the sensex to close with gains.
The 30-share index opened strong at 4256.07, dropped to its intra-day low of 4179.33 before ending at 4212.29, against Wednesday’s close of 4205.56, in a gain of 6.73 points.
Oil refiners’ shares also flared up with HPCL rising over 3 per cent to Rs 410.35 and Bongaigaon Refinery shooting up by more than 6 per cent to Rs 80.25.
Despite today’s selloff, many analysts continue to bet on old-economy shares, especially after the Reserve Bank of India (RBI) said on Wednesday that growth rate of gross domestic product (GDP) will be over 6 per cent in 2003-04. At the heart of the optimism is a strong agricultural recovery following a normal monsoon, apart from a healthy industrial performance in days ahead.