Importantly, although the Sensex has now recovered almost its lost ground (about the same level of 4000 points as on October 6) during the past one month, the uptrend is not led by software stocks.

The market is led by domestic and foreign investors resorting to value buying on buyback and restructuring rumours. Since most of the old economy stocks are quoting near their 52-week lows, they have been picked up in large numbers, including those from the most dormant sectors like cement, pushing the Sensex northwards.

In the case of software companies, very few of them have been able to witness appreciation in prices even as most of them have declared substantial growth in turnover and profits during the quarter ended September 2000.

An analysis of the IT stock prices on BSE, between October 6 and November 7 (during the period Sensex touched its 52-week low at 3545 points), reveals the same.

Only 25 per cent of the total IT stocks have gained more than what they had lost during the downtrend from October 6 to October 18, while 54 per cent of A group companies have already recovered the losses during the same period.

This indicates that the rally was restricted to a few stocks in the A group. B1 group was the worst hit, with over 86 per cent of the stocks still tottering below the prices as on October 6. The sector could see only six scrips recovering the losses over the period.

In the B2 group, as many as 73 per cent of the IT stocks are trading below their October 6 prices. The B1 and B2 groups combined have seen only 36 out of 153 stocks or 23 per cent stocks recovering.

NIIT and Digital Equipments were the major gainers in the A group quoting 17.44 and 12.10 per cent over their prices as on October 6. In the B1 group, Tata Infotech and HCL Technologies gained substantially with 21.46 and 15.63 per cent over the same period. The major losers, on the other hand, include Satyam Computers, HCL Infosystems, SSI and Pentamedia Graphics.