The Sensex opened the day with a gap of 40 points, and touched a peak of 4725.55 points. However, during the second half of the day, a large portion of gains were eroded as profit-booking emerged, and the Sensex closed with a net gain of 23 points at 4641.48.

While there was huge selling pressure in pivotals like HLL, SBI, Telco and ITC, Infosys along with NIIT held the Sensex and hit the upper end of the circuit filter. Other software scrips like Silverline, Sonata Software, Tata Elxsi, Wipro, Aftek Infosys, and Global Tele alsoshowed impressive gains.

It has been a relentless and spectacular rise for Infosys on the bourses. Since the beginning of this month, Infosys has risen an astounding 29.54 per cent from Rs 5,450 in just 13 trading sessions.

The Infy ADR closed at $115 7/8 on Friday at Nasdaq. Despite the sharp spurt in the domestic price, the ADRs continue to trade at a premium of around 30 per cent to the domestic price. The Infy ADR has become one of the most high priced information technology stock. Infosys ADR, at $115 7/8 on an earning per ADR of $ 0.41, is commanding a very high price earning multiple of 282.

The discounting is way above the price earning enjoyed by its peers on the Nasdaq. Based on last Friday's closing prices, IBM is trading at a price earning of 30.96 times, Microsoft commands a price earning of 67.91, Oracle trades at a price earning of 48.4 and Intel at 40.11.

Although Infy is outperforming other IT stocks in terms of price earning, the capitalisation is way below that of other IT majorsowing to a relatively low equity. Microsoft has a market capitalisation of $ 492.2 billion, IBM ($229.3 billion), Oracle ($ 62.3 bn) and Intel ($ 279.9 billion).

"A lot of buying has emerged in the last two sessions in IT stocks and optimistic operators, who expect a stable government, are trying to build positions in IT stocks. The software sector is expected to announce good results for the second quarter with the depreciation of the rupee to Rs 43.5 against the dollar only adding to the bottomline," said Ketan Desai at Asit C Mehta Invest Intermediaries. Software companies will be the first to announce results for the second quarter (first half) with some of the results coinciding with results for the Lok Sabha. "Investors will like to be in a sector which is not affected by poll results," said Milind Karmakar at Dala and Barocha.

The Infosys' board is meeting on October 8, 1999 to take up the quarterly results. Expectations are of a 80-100 per cent earnings growth in the second quarter are, thus,driving the stock northwards.

"Most of the software companies peformed pretty well in the first quarter and logged in impressive figures. Infosys posted a PAT of Rs 60 crore in Q1 and if we extrapolate those figures, the company is likely to end the fiscal with a net profit of Rs 250-270 crore against Rs 130 crore for the previous fiscal," said a software analyst.

The discounting (based on 1998-99 earnings) for the scrip in the domestic market is around 170. However, based on the annualised first quarter earnings, the scrip currently trades at a price earning of 95.

The move to safer bets like IT and pharma stocks in the market was anticipated following the nervousness resulting from exit polls. According to marketmen, the Star Plus exit poll on Tuesday will decide the future course of the market.