CHENNAI: Even as the fate of IT companies still hangs in balance over the trouble brewing in US, domestic investors turned bullish on tech stocks on Tuesday as major ones landed smart gains in the range of 3-10% on Dalal Street.

The BSE IT Index, which consists of 14 tech companies, gained 5.3% or 149 points. With tech stocks losing an average 22% in the last one month, investors saw value in beaten down IT stocks. Tuesday's increase saw investor wealth in over 200 tech/software stocks rising by a whopping Rs 10,000 crore.

The main issue for Indian IT service companies, some point out, remains the low visibility beyond December'08 as their clients are yet to take a final call on their budgets.

But today investors put their bets on the sector with the likes of Rolta rising by 20% and even frontliners such as Patni Computers, NIIT, Satyam, Infosys and Wipro joining the party.

Experts do not view Tuesday's rally, which saw 6 out of 10 tech stocks rising, as a major turnaround.

"We see uncertainity for tech sector as a whole. With major tech stocks losing around 25-30% last month, valuations are bound to attract investors as downsides from here may seem limited," Gaurav Dua, Head of Research, Sharekhan said.

The gloomy outlook, however, wasn't recognised by buyers as investor wealth soared in top tech companies such as Infy (Rs 4,400 crore), TCS (Rs 1,600 crore), Satyam (Rs 1,340 crore) and Wipro (Rs 1.250 crore).

"Although we have not had any BUY ratings in our large cap IT services universe since our downgrade on the sector in May 2008, we believe that valuations have depressed enough which could make the case compelling on accumulating these stocks soon," feel Emkay Research IT analysts Manik Taneja and Sweta Sinha.

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