Cap Gemini Jumps to 17-Month High on Infosys Target: Paris Mover
Shares of the Paris-based company jumped as much as 4.4 percent to 34.98 euros, the highest intraday level since Aug 1. 2011. The shares traded 4.2 percent higher at 9:52 a.m. at 34.91 euros.
Cap Gemini was the biggest gainer on the benchmark CAC 40 Index and led the European Stoxx 600 Technology Index. (SX8P) About 381,000 shares changed hands in the first hour of trading, more than half the stock’s three-month average daily volume of 761,000 shares.
“Cap Gemini is getting a boost from the positive Infosys announcement,” said Laurent Daure, a Paris-based analyst for Kepler Capital Markets. “Cap Gemini is the only European IT services company with significant exposure to the U.S. and to finance -- two points on which the Infosys report is encouraging.”
Cap Gemini, which competes with International Business Machines Corp. (IBM), got about 19 percent of its sales in North America in 2011, according to data compiled by Bloomberg. Cap Gemini’s sales shrank 2 percent in 2012 to 10.3 billion euros, according to the median of 15 estimates compiled by Bloomberg.
Infosys, based in Bangalore, jumped by as much as 17 percent, the most since it began trading in Mumbai in 1993, after raising its sales forecast by about 3 percent to 407.5 billion rupees ($7.5 billion) as it reported better-than- expected profit for the third quarter.
Infosys said it is benefiting in the U.S. from the shift in the government’s spending focus to health care and other civilian services from defense.
“Across the board in America, we’ve seen good traction,” said Ashok Vemuri, the head of Infosys’s business in the Americas. The government spending move “is good news for us,” he said.
To contact the reporter on this story: Marie Mawad in Paris at email@example.com