Punters take position on tech counter

The BSE IT index was the performer among sectoral indices on Tuesday, rising over 2.5%. With the outlook on the market turning hazy, some investors are of the view that it could set off a vicious circle of dollar outflows, as overseas investors rush to redeem their investments from exchange-traded funds, which in turn would push their net asset values lower and trigger another round of redemptions. Capital outflows cause the rupee to weaken against the dollar, which is good news for IT services companies as they bill their clients in dollars.

Contributed by Vijay Gurav & Santosh Nair