IT, telecom scrips lose less, gain more than Sensex

Mumbai, July 30 | Updated: Jul 31 2006, 05:55am hrs
The IT and telecom sector stocks have outperformed the 30-share BSE Sensex in the last two months. These stocks have beaten the elite benchmark index twice, when the markets witnessed drastic fall, and again, when they posted recovery during the said period.

After peaking 12,621 points, the Sensex began its southward journey from May 11, mainly on the back of US Fed hiking interest rate by 25 basis points. In its downhill journey, the key index lost 3,067 points, or 24.32%, till June 15. It, however, began to recover since then and has gained 1,135 points, or 11.89%, till July 28 to close at 10,680 on Friday.

Contrary to this, the two BSE sectoral indices - BSE IT and BSE Teck - lost less than Sensex during the meltdown and gained more than the benchmark during its recovery period. The BSE IT shed 20.64%, or 854 points, between May 11 and June 15, while it recovered 18.63 %, or 611 points, during June 15 and July 28. The BSE Tech shed 21.87%, or 617 points, between May 10 and June 15 and recovered by 17%, or 374 points, at 2,581 points between June 15 and July 28.

Tejas Doshi, head of research, Sushil Finance Consultant, said, "Investors have a better comfort level with the telecom and IT stocks. The better growth prospects of the companies has strengthened the investor sentiment towards these two sectors.