IT shares extend rally, CNX IT index crosses 10,000 mark

Infosys, TCS and HCL Technologies are trading at lifetime high, rallied more than 3% each on the NSE.

Shares of information technology (IT) companies continued their upward march with the National Stock Exchange (NSE) CNX IT index crossing 10,000 mark for the first time in history buoyed by better-than-expected third quarter earnings from Infosys.

Infosys, Tata Consultancy Services (TCS) and HCL Technologies are currently trading at their lifetime high, rallied more than 3% each. Vakrangee, Persistent Systems, Rolta, Polaris Financial Technology, eClerx Services and Wipro too, trading higher in the range of 1-3%.

CNX IT index was up nearly 3% at 10,051 compared to 1.2% rise in CNX Nifty in noon deals. In past one month, the index has rallied 12.2% against 1.13% gain in benchmark index.

Infosys has surged nearly 4% to Rs 3,674, also its record higher on the NSE. On Friday, the company had posted a better than expected 145bp quarter-quarter (qoq) growth in EBIT margin to 25.0% for the quarter ended December 2013, led by operational efficiency with inch up in utilization level and sequential decline in S&M spends. The company expects margins to stabilize around the current levels in the medium to long term.

Meanwhile, Infosys has revised its USD revenue growth guidance for FY2014 to 11.5-12% (expectation: 11-12%) from 9-10% given earlier, implying 1.4% qoq USD revenue growth in 4QFY2014 to meet the upper end of guidance which seems attainable, says analyst at Angel Broking in a note.

TCS and HCL Technologies are up 3% each at Rs 2,349 and Rs 1,342 respectively. The board of directors of these companies schedule to meet on January 16 to announce October-December quarter earnings.