Nifty closes at new 30-mth high; IT, infra, FMCG support

The benchmark Nifty closed at a new 30-month high on Wednesday, powered up by technology, capital goods, power, FMCG and auto companies' shares; even heavyweight ICICI Bank added some strength.

Market gained strength in last one hour of trade, after witnessing consolidation since yesterday. However, it has shrugged off negative European cues; France's CAC, Germany's DAX and Britain's FTSE were trading 0.5-1.3% higher, at the time of closing of Indian equities. The Dow Jones and Nasdaq futures were down 0.4-0.5%.

Information Technology was the leading sector today post stellar perfomance from Cognizant in its quarterly numbers. TCS surged 4.4%; Infosys, Wipro and HCL Tech rallied 2.8-4%. Cognizant has reported 15% jump in revenue at USD 1.105 billion and 13.7% rise in net profit at USD 172.2 million in Q2CY10, (QoQ). The company has increased FY10 revenue guidance to 36% at USD 4.46 billion while earlier guidance was 25%.

Gordon Coburn, Chief Financial Officer and Chief Operating Officer of Cognizant said quarterly performance was boosted by discretionary development spending by clients. "We saw a very strong rebound in discretionary development spending that grew over 22% sequentially. In particular we saw strength in financial services as well. That grew 18%, so faster than the company overall. That was driven by a combination of discretionary work as well as some M&A work. But overall the key thing we saw in the quarter was a strong rebound and clients starting new discretionary development projects," he said.

IV Subramanium of Quantum AMC said demand was not a problem for IT companies. "I may twig it a bit more upwards or slightly overweight it, not necessarily because of what cognizant did or the numbers indicated. But in general as we interacted with more IT companies, clearly demand is not a problem at all and whether it's in Europe or the US the demand seems to be picking up quite well."

The 50-share NSE Nifty closed above 5450 level for the first time since February 5, 2008; it rose 28.30 points or 0.52% to 5,467.85. The 30-share BSE Sensex ended at 18,217.44, up 102.61 points or 0.57%.