IT stocks zooms nearly 4 pc on Infy earnings

Shares of IT companies on Tuesday gained over three per cent in the morning trade buoyed by good quarterly results of Infosys, despite a weak broader market.

Shares of IT companies on Tuesday gained over three per cent in the morning trade buoyed by good quarterly results of Infosys, despite a weak broader market.

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Analysts said that the street was expecting a more subdued Q3 figures, but the 3.6 per cent Y-o-Y decline in net profit of the IT bellwether stimulated buying in the entire IT counter.

Shares of the country's second largest software exporter, Infosys Technologies, jumped 3.4 per cent to Rs 2,573 after the outsourcer reported a quarterly profit of Rs 1,582 crore, a dip of 3.6 per cent over that in the same quarter in 2008.

The country's largest software firm TCS jumped 4.30 per cent to a high of Rs 745 on BSE. Wipro rose by 3.82 per cent to Rs 687.50 and HCL Technologies was up 3.21 per cent at Rs 366.50.

"Investors are expecting that the other sector companies would report a similar kind of earnings growth or even better figures. This helped buying in the counter," SMC Global Vice President Rajesh Jain said.

However, marketmen said that the rising rupee could act as a dampener for the IT stocks going forward. A strong rupee adversely impacts the profits of IT companies (as they get less rupees against every dollar earned), which in turn affects their margins. The rupee is currently hovering at 45 level against the US currency.