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Friday, 4 February, 2000, 15:57 GMT
Technology shares ride firm

By Sanjeev Srivastava in Bombay

This week Indian markets have once again been divided between bullish performances by technology stocks and a lacklustre show by non-technology shares.

Technology stocks rallied on the back of positive corporate announcements in the IT sector and the rally on the Nasdaq.

They were also helped by fresh and liberal foreign investment guidelines announced by the Indian Government and a possible cut in interest rates by the Reserve Bank of India, the country's central bank.

Software majors led the way
The Bombay stock exchange's (BSE) sensitive index ended the week about a third of a per cent lower at 5313 points over last week.

Trading was dull in economy and commodity stocks which are still given a much higher weight on the BSE index over technology stocks.

The markets thus remained depressed because of a fall in prices of heavyweight shares, such as Telco and Tisco, and the sideways movement in the price of Reliance and Hindustan Lever scrips.

Technology gains
Satyam Computers
Global Telesystems
These four scrips alone account for nearly 20% of the BSE index and thus play a crucial role in the up or down movement of the sensitive index.

In the past, this bias was justified as movement in these four scrips actually set stock market trends in India.

But things have changed in the last couple of years following the boom in the technology stocks.

Wipro's Microsoft deal

The star of the week was software major WIPRO.

The week saw the company's market capitalisation soaring past the 1000 billion mark on the back of an strategic deal with Microsoft Corp.

Wipro and Microsoft
Partners in software development and testing
Wipro to outsource software
Collaborate on Windows 2000
Work on internet applications
Microsoft said it had appointed WIPRO as a partner for outsourcing software development and testing in India.

The two companies will also collaborate to enhance capabilities around Microsoft's Windows 2000, Windows CE and internet applications.

The WIPRO scrip, which has nearly doubled in the last three weeks, gained 1,100 rupees this week to close around 5,200 rupees.

At its annual meeting, currently underway in Bombay, the National Association of Software and Service Companies(Nasscom) projected the Indian software sector maintaining a growth rate of over 50% for the next 10 years.

This turned the sentiment bullish in favour of technology stocks and the prominent gainers in this sector included Infosys, Satyam Computers, Pentafour, NIIT and Global Telesystems.

With the markets expecting major concessions for the technology sector in the forthcoming budget, market analysts feel that IT stocks should remain firm in the next week.
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28 Jan 00 |  South Asia
Mixed results for India's markets
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Hi-tech shares spur bullish mood
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