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Information technology

Monthly monitor
The IT sector has outperformed the BSE Sensex for most part of FY2011. However, the outperformance has been steeper in the last month ie December 2010. The outperformance is on the back of positive data points coming out of US coupled while better than expected headline numbers from Accenture and Oracle further cemented the strong sector demand uptick, more importantly on discretionary spending. We are now entering the earning season in the month of January 2011. Q3 is traditionally a weak quarter for the sector, nevertheless we believe topline numbers would pour some positive surprise even in the weak quarter. We continue to remain positive on the sector and our top picks in the sector remain HCL Technologies and Polaris Software Lab.