Infosys Technologies and Satyam Computer had to contend with intense selling pressure from institutions on Monday, and this led to their figuring as the biggest losers in the Sensex so far.
Infosys Technologies, the second biggest software exporter, slipped 2.57% to Rs 4,365 and Satyam Computer, the fourth largest software exporter, dropped 1.68% to Rs 219 on the BSE by 12:10 IST.
About one lakh Infosys Technologies and over 1.34 million Satyam Computer shares were traded on BSE till then. In the seven sessions between 29 January and 7 February 2003, Infosys Technologies and Satyam Computer had risen 7% and 3.55%, respectively.
As per market talk, Unit Trust of India is actively selling on the counter today. But it is not just these two that are being beaten down today. Other technology stocks have also been affected following a weakness in the US markets and the cautious undertone from rising fears over an US-Iraq war and a diplomatic stand-off between India and Pakistan.
On the US-Iraq crisis, the next key deadline is 14 February 2003. Chief UN weapons inspectors Hans Blix and IAEA rep 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 in New York.
Dealers say that in the current scenario, war between the US and Iraq seems inevitable. This is likely to have an impact on local as well as global markets. If the US-Iraq war takes place, the Indian software sector will be badly affected, putting further pressure on both 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.
Meanwhile, one dealer says the fall in tech scrips on Monday is also over proactive government moves to accelerate the PSU divestment programme. With government expected to invite bids for divesting its 34% stake in HPCL, funds have been diverting monies from IT stocks to PSU stocks.
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). Satyam Computer posted a 2.2% fall in net profit to Rs 116.73 crore (Rs 1.16 billion) on net sales increase by 19.8% to Rs 522.26 crore (Rs 5.22 billion).
BSE Codes: 500209, 500376
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