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IT shares gain; brokers cite rising demand

Logos of Tata Consultancy Services (TCS) are displayed at the venue of the annual general meeting of the software services provider in Mumbai, June 29, 2012. REUTERS/Vivek Prakash/Files

Reuters Market Eye - Shares in software exporters gain as brokers cite the sector is facing rising demand from the United States and Europe.

Goldman Sachs upgrades Tata Consultancy Services Ltd (NSI:TCS.NS - News) to "buy" from "neutral" and raises the Indian IT sector's dollar revenue growth to 15 percent by fiscal 2015 from 12 percent, citing stronger demand in the United States/European Union, rise in outsourcing deals and a better deal pipeline.

Goldman Sachs also adds Tech Mahindra Ltd (NSI:TECHM.NS - News) to its conviction buy list.

TCS gains 3.9 percent and Tech Mahindra is up 3.6 percent.

Overall 2013 IT budget growth expectations improved by 110 basis points to 4.3 percent as per Morgan Stanley's CIO survey for October.

The investment bank says the rebound in European budget growth is particularly robust and coincides with improving macro indicators.

(Reporting by Abhishek Vishnoi)