The Telegraph
Since 1st March, 1999
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Sledgehammer slices software stars

Mumbai, April 11: Investors punished technology stocks for the second straight day as the pall of despair over Infosys’ number nightmare engulfed other companies gearing up to flash their performance tallies.

For the country’s software paragon, the torrid time on the trading floor did not seem to end — the Infosys share tested a 52-week low at Rs 2,617.50 in a plunge of 14.03 per cent; it had plumbed Rs 2,420, the lowest point the share has seen in 18 months. On Thursday, it descended a gut-wrenching Rs 1,100 from Wednesday’s finish.

The market is awash in concerns that other computer majors due to release their annual results will face a predicament similar to the one dogging Infosys.

The worries weighed down the Bombay Stock Exchange (BSE) sensex, which closed below the crucial 3000-psychological barrier at 2997.87 in a loss of 37.46 points. Today’s decline, the fourth in as many days, sent the key stock barometer five months back in time.

Operators stung by bland forecasts of a 11-12 per cent growth in the first three months of the current financial year were in no mood to spare Infosys this morning. Brokers said had it not been for purchases made by Life Insurance Corporation-led financial institutions, the scrip would have slid to unimagined depths.

Giving Infosys company in its ordeal were Wipro and Satyam Computers, two majors set to unveil figures next week and over the later half of this month. There is a sense their earnings projections could be crimped by the war and the killer flu stalking much of Asia. Wipro was down 7.80 per cent at Rs 929.05, while Satyam lost around 4 per cent to end the day at Rs 144.75.

However, there were some that escaped investor wrath: HCL Technologies shot up by more than 5 per cent to Rs 146.80, Digital Global rose 2.10 per cent to Rs 502.30 and Mastek, which had been savaged in a 50 per cent plunge on Thursday, finished higher by 7 per cent.

The sensex was weakened by declines in Infosys, Dr Reddy’s Lab, Satyam Computers, though rebounds in Reliance, Grasim, Hero Honda set soaked up some losses. Hero Honda carried the day as the share notching up the sharpest gain, jumping by more than 6.67 per cent.

As infotech shares remained the day’s worst performers, there were fears that several operators were in trouble and that there could be payment defaults when the cheques for margin money go into clearance. Banks were closed today on account of Ram Navami.

However, the National Stock Exchange (NSE) during the day denied reports about payment problems on the exchange. “We clarify that all payments and settlements at NSE are smooth,” its release said.

Some mutual funds were feeling the heat as their most-favoured infotech stocks take a beating. Several terminals were reported to be shut as brokerages exhaust margins on the two premier bourses, sources said.

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