IT stocks gain on Cognizant's strong outlook

Reuters Market Eye - Indian software services exporters gain after Cognizant Technology Solutions Corp forecast current-quarter revenue above market expectations after posting an 18 percent rise in the first quarter.

Infosys Ltd gain 0.5 percent, Tata Consultancy Services Ltd is up 1.1 percent while HCL Technologies Ltd is up 1.9 percent. U.S.-listed Cognizant rose 3.3 percent.

Jefferies views Cognizant's results and outlook as "an incremental positive" for Indian IT, although it notes that a proposed bill on immigration in the U.S. remains an overhang for the sector. (For Cognizant results story, click http://in.reuters.com/article/2013/05/08/cognizanttechnology-results-idINDEE94709120130508)

Still, Jefferies notes Cognizant told analysts during a conference call that clients are not delaying decisions on account of the immigration bill.

 

"This comes as a relief to us, as we feared that uncertainty could potentially slow the flow of business to Indian IT players in the near term," Jefferies said.

(Reporting by Abhishek Vishnoi)