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This is not a tech turnaround: Fund managers

NetScribes/Rajiv Banerjee

The Nasdaq rally fuelled by US Federal rate cut lifted scores of technology stocks to their upper circuit limits at the BSE on Thursday. But most fund managers polled by NetScribes were of the opinion that the BSE rally is sentiment-driven and does not indicate a turnaround for the battered technology stocks. They agreed that individual corporate performances will ultimately dictate the stocks' fate.

SBI Funds: "Upfront, the impact is positive due to the rally seen on the Nasdaq. The rally is primarily short covering by operators. The same will hold true for technology stocks in India as well. The BSE rally can't be termed as a change in policies by foreign institutional investors. We have to wait and watch the situation unfold in the US economy in the coming days."

Prudential-ICICI: "The rally seen on the BSE is purely sentiment-driven. The rally seen in the tech stocks at Nasdaq has driven the sentiments at the infotech counters in India as well. It is a short-term impact and more important fundamentals like the results of the top-rung companies will determine the fund allocation among the infotech counters."

DSP Merrill Lynch: "Due to the Federal rate cut, liquidity is expected to be boosted in the US, increasing flows into the equity markets. So to some extent, one might see some infusion of fresh funds at the technology counters, but it will ultimately depend on the corporate earnings of the technology companies."

Lazard Capital: "It is essentially short covering taking place on the BSE. But one has to wait and see the trend for another 3-4 days. The effects of the US Federal rate cut will slowly percolate and things will become clearer. So, it will not be right to say that the turnaround has already happened on the technology counters in India."

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