The uncertainty over war has set off broad selling in the market, but tech stocks seem the hardest hit.
This seems apparent in the fortunes of the three tech BSE Sensex listings on Monday - HCL Technologies (down 4.29% to Rs 148.20), Infosys Technologies (down 2.24% to Rs 3,987) and Satyam Computer (down 3% to Rs 189.40).
The software sector is bearing the brunt of war fears as, if war manifests, the IT sector will be the hardest hit. A war could stymie order inflows from the US , hitting revenues of these companies adversely. The sector receives over 65-75% of its export revenues from the US. Reports that a legislature in the state of Washington may soon consider a bill that could make outsourcing from India difficult, has further raised concerns about future earnings of Indian IT companies.
In the last one week, the Computer Software sector, comprising 123 large, medium and small companies lost 5.7%, or Rs 5,061.7 crore (Rs 50.61 billion), in market capitalisation.
CL Securities is believed to be offloading in software pivotals for some anonymous party.
Reports of a probable move by the Securities and Exchange Board of India to debar foreign institutional investors from participating in trading through the participatory note route, as a part of the code of conduct for them, has raised fears that the activity of FIIs may decline. Tech stocks are considered to be favourites of FIIs and if Sebi debars FIIs from participating through the P-notes route, tech counters may be hit severely.
Non-Sensex pivotals like Wipro (down 2.42% to Rs 1,300.20), Digital GlobalSoft (down 1.65% to Rs 607.30), i-Flex (down 0.96% to Rs 832) and Hughes Software (down 3.28% to Rs 172.20) were other major losers among IT stocks.