Tech stocks drag Indian shares lower; Infosys hits 8-month low

Indian shares touched three-week lows on Monday, hammered by losses in IT stocks after Infosys crashed 9% on missing March-quarter profit estimates, while inflation concerns globally also weighed on investors' sentiment.

The NSE Nifty 50 index fell 1.89% to 17,142.50, as of 0445 GMT, while the S&P BSE Sensex slid 2.15% to 57,089.44. In a holiday truncated week, both indexes logged weekly losses of more than 1.5% each, last week.

On Monday, top software services provider Infosys slumped 9.1% to an eight-month low.

The firm's consolidated net profit for the March quarter was 56.86 billion rupees ($744.24 million), lower than analysts' expectation of 59.80 billion rupees.

That dragged the Nifty's IT sub-index down more than 4%, making it the biggest decliner among major sub-indexes.

Last week, rival Tata Consultancy Services also slightly missed estimates. Its shares slid 3.5% to a one-month low on Monday.

"It was a weak set of numbers from Infosys and TCS also was a disappointment; the companies are under a lot of cost pressure and this will affect mid-cap stocks and we will see a valuation reset," said Saurabh Jain, assistant vice president at SMC Securities.

Mindtree was down 5% ahead of March quarter results.

Beyond IT stocks, India's top private-sector lender HDFC Bank extended losses to an eighth session, slipping 3.5% after it posted March quarter results over the weekend.

The bank's net interest margin, a key measure of profitability, contracted due to rise in share of corporate loans and slower growth in credit cards and auto loans, brokerage Jefferies said in a note.

Meanwhile, several markets in Asia and Europe were closed on Monday. U.S. equity futures, however, declined amid a rise in oil prices due to the deepening crisis in Ukraine. [O/R]

"Globally, inflation concerns continue to be on investors' minds; any new developments on the Russia-Ukraine situation would be a key deciding factor going forward," Jain added.

($1 = 76.4000 Indian rupees)