Infosys Technologies declined further on Tuesday, following selling pressure from institutions.
The scrip of the second biggest software exporter from India came off from its intra-day high of Rs 4,365.60 in afternoon trades, and was later down by 1.05% at Rs 4,263 on the BSE. A relatively higher volume of over 196,000 shares was recorded on the counter till 13:05 IST.
In the last three sessions, the Infosys Technologies scrip shed 6.3% from Rs 4,549 on 6 February 2003.
Institutions have been sustained sellers on the Infosys counter in the last few sessions. As per market buzz, CL Securities was an active seller on the counter, offloading over 50,000 shares. On Tuesday, there were rumours that Unit Trust of India sold the Infosys stock.
Dealers said the market has turned lacklustre due to the US-Iraq tensions. Meanwhile, chief UN weapons inspectors Hans Blix and Mohamed ElBaradei will return to Baghdad for talks on 8 February 2003 and on 14 February 2003, they will present a second report to the UN Security Council.
Dealers said that if a war breaks out between the US and Iraq, the Indian software sector will be badly affected, putting further pressure on top lines as well as bottom lines of tech companies. There may be a delay in the flow of orders from overseas, especially the US. As a result, investors may offload software stocks, thereby dragging the overall market lower.
They said that reports that a few states in the US are also planning to stop business process outsourcing orders to India has also hit the sentiment for Infosys as well as other IT stocks.
Meanwhile, one of the dealers said the fall is also on rumours that Infosys may delay the proposed move to convert some local stocks into American Depository Shares. In early December 2002, the Infosys board approved the plan to convert between two to three million equity shares of the company into ADS. The company will hold a shareholders meeting on 22 February 2003, to seek their nod for the proposal.
For the third quarter ended 31 December 2002, Infosys Technologies registered a 24.4% rise in net profit to Rs 256.31 crore (Rs 2.56 billion) on net sales of Rs 958.64 crore (Rs 9.58 billion).
BSE Code: 500209
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