Tech stocks in limelight

Krishnan Thiagarajan

AN unexpected interest rate cut by 50 basis points announced by the Greenspan-led US Federal Reserve on Wednesday literally set the Nasdaq and Dow on fire.

The rate cut between two Federal Open Market Committee meetings had taken the markets by surprise, even though at the last FOMC meeting, the Fed had warned that they would resort to a rate cut if necessary. The Nasdaq rallied by 325 points or 14 per cent, one of the biggest single day gains in the history of the US Technology Index, Nasdaq.

Taking cue from this sharp rally, the BSE Sensex, S & P CNX Nifty and the broad-based BL -250 Index appreciated significantly on Thursday's trading. Although in the wake of profit warnings from companies such as Inktomi led to the waning interest in technology shares on the following day, the BSE Sensex and BL -250 remained upbeat moving contrary to the Nasdaq on Friday's trading. Hogging the limelight through the week were the technology stocks, figuring among the top list of gainers during the course of this week. This sharp rally was also triggered by the receding fears of a US slowdown following the surprise rate cut and upbeat sentiment at Nasdaq. At the end of the week, the BL -250 Index closed 5.9 per cent higher at 1268.18 points.

Among the sectoral indices, the BL Technology Index was clearly the story of the week, with the index appreciating by 13.2 per cent to close at 3473.7 points. The other major gainers in sectoral indices were Bank & FI - 7.6 per cent, Commodity - 6 per cent, GDR / ADR - 5.8 per cent, Core Sector - 5.6 per cent and PSU - 5.5 per cent. Even in this fairly bullish market in the week, the lone loser was the Capital Goods Index which declined by 1.3 per cent. The value buying in key counters such as BHEL, Thermax and Wartsila NSD bolstered the Capital Goods Index last week, appears to have petered out. With the exception of Capital Goods all the other indices ended up in the positive territory.

The score card of industrial indices was also on expected lines with the BL Computer Hardware and Office Equipment Index leading the pack with an appreciation of 15.4 per cent. Closely following Computer Hardware Index was Automobile LCV & HCV Index which appreciated by 14.8 per cent. The other major gainers during the week were Plantations - 14.5 per cent, Computer Software - 11.2 per cent, Banks & FI - 10.1 per cent Telecommunications : Services - 8.5 per cent.

Among the significant losers during the week were Food & Dairy - (2.4) per cent, Engineering - Electricals - (1.9) per cent, Paints and Varnishes - (1.6) per cent, Engineering - Compressors - (1.6) per cent and Chemicals -Inorganic - (1.5) per cent.

The stocks which occupied centrestage were Archies Greetings - 28.7 per cent, Satyam Computers - 19.6 per cent, Telco - 17.5 per cent, Titan Industries - 17.3 per cent,Wipro - 16.4 per cent, Wockhardt - 16.4 per cent. The losers are BOC India - 16.2 per cent, Bausch and Lomb - 9.8 per cent, Wartsila NSD India - 8.3 per cent, Greaves - 8.1 per cent and Birla Corp - 8.1 per cent.