Nasdaq Slide Blankets Infosys Show

The technology sector stocks lost steam as they succumbed to Nasdaq's weakness after an Infosys's earnings inspired early rise today.

Infosys ended down 1.82 per cent at Rs 3,330.10, after rising as much as 2.5 percent in the morning following better-than-expected first quarter earnings. The stock has a 8.2 per cent weightage on the sensex. Nasdaq's 4.7 per cent slide over the past two days pulled down other frontline tech stocks.

The other tech stocks also took beating today on the Bombay Stock Exchange (BSE). Wipro was down 2.34 per cent to close at Rs 1361.45. A total of 1.64 and 3.45 lakh shares changed hands on the BSE and NSE, respectively.

Satyam was down by 2.83 per cent at Rs 248.70. HCL Tech closed lower at Rs 229.90 down by 6.53 percent. Polaris was down 2.32 per cent at Rs 244.05 and Digital was down by 1.56 per cent at Rs 685.35.

"A sustained downtrend on the Nasdaq has made investors nervous about the tech sector," said Manish Kanchan, the chief investment officer at A W Holdings. He said Infosys' results reflected continued pressure on margins though robust sales growth was a positive. "I don't think anybody will jump in to buy since the current growth rate does not justify a higher price to earnings ratio."

Vijay Bhambwani, CEO, BSPLindia.com said that, "Having taken Infosys's results rather un-enthusiastically, expect a downward trend in tech counters and a defensive buying in safer stocks such as pharmaceuticals, automobiles and oil & gas sectors. Unless the sensex breaches 3405 and the Nifty 50 surpasses the 1106 resistance, the current weakness will persist."

"A strong growth in sales coupled with higher staff intake indicates the company is probably at the bottom of the difficult phase," said a equity investment head.