Mumbai: A surprise strong second quarter performance by key IT companies sparked a sharp rally in stocks aiding the SENSEX to breach the 3,000-psychological barrier during the week on the Bombay Stock Exchange (BSE) that had started off on a firm footing on optimism about speedy reforms.

Initially, oil public sector undertakings (PSU) stocks were in the limelight on hopes of early privatisation of oil sector following reports about some compromise formula for the clearance of divestment in HPCL and BPCL as also a strong assertion by Prime Minister Atal Behari Vajpayee strong assertion on continuation of tough reforms measures to achieve 8 per cent annual growth during the Tenth Plan and that the privatisation programme in on fast track and irreversible.

Investors' focus was later shifted to IT sector and speculators made hectic purchases in select software stocks after the announcement of excellent second quarter working results by the IT bellwether Infosys Technologies on October 10.

The IT major beat the market projections and posted higher-than-expected growth by netting a profit of Rs 225.77 crore for Q2, up by 12 per cent over corresponding period last year. Hughes Software also came out with encouraging results with its Q2 net profit rising by 32 per cent to Rs 8.3 crore.

This too was said to be far beyond market expectations even after making substantial provision for taxes.

Traders were not only surprised over the performance of these companies but also satisfied that foreign funds which had been net sellers due to fears of second gulf war between the US and Iraq, have joined the bandwagon.

PTI