Infosys surges over 5% as traders churn portfolios

MUMBAI: Shares of Infoys, which was recently beaten down following exits of top management level executives, surged over 5 per cent in trade today as traders shifted focus on technology stocks.

There are also rumours on the street that the company may announce buyback worth $2 billion in its AGM on June 14.

There has been a sharp movement in cyclicals ahead of any concrete policy announcement. The benchmarks are at all-time high and traders are booking profits and entering laggards like Infosys.

“The IT index has fallen by close to 10 per cent and the market has gone up by 20-25 per cent depending on whether you are talking about midcap stocks or the large cap universe. So it is time to put in money,” said Ramanathan K, CIO, ING Investment Management.

“The concern earlier was significant rupee appreciation, but given the fact that the rupee has been pretty range bound in the near term, around 59-60 levels and we are not seeing a significant appreciation. If rupee is expected to stabilise, clearly there is good amount of money to be made in IT. So our view is quite positive on IT,” Ramanathan added.

The RBI has been trying to keep the rupee steady near Rs 59 per dollar mark even as the strong dollars inflows continue.

“I do not think the rupee is going to appreciate a lot. It is very difficult to predict next six months or nine months, but again if you look back at what I said earlier that India needs to become more competitive especially in exports, there is a certain cap on rupee appreciation over the long term. So in that case if you see the valuation of IT companies today, they are obviously not very expensive,” said Manish Gunwani, Sr Fund Manager, ICICI Pru AMC to ET Now.

At 10:45 a.m.; Infosys was at Rs 3,215.05, up 4.82 per cent, on the BSE. It touched a high of Rs 3,255 and a low of Rs 3,099 in trade today.