Sensex trades sharply lower; IT stocks drag

MUMBAI (Reuters) - The Sensex fell on Tuesday, dragged by IT stocks after a disappointing quarterly forecast from Cognizant Technology Solutions Corp , India's third-biggest software company, while fears of a global slowdown led investors to dump risky assets.

Cognizant forecast its slowest quarterly revenue growth in 14 years, adding to mounting worries about clients keeping a tight lid on technology spending.

Asian share markets were scorched on Tuesday as stability concerns put a torch to European bank stocks and sent investors stampeding to only the safest of safe-haven assets.

"The last bounce from 7200 was bought by a section of investors and now they seem to be selling at higher levels, they're getting justification from the ongoing global selloff," said Arun Kejriwal, founder, Kris Research.

"Economy seems to be bottoming out, but that will at least take one-two quarters to reflect into earnings of the companies," Kejriwal added.

Late on Monday, India reported GDP figures that suggested India's economic growth slowed in the last quarter of 2015, adding to pressure on Prime Minister Narendra Modi's government to expedite stalled reforms in the next session of parliament when it presents its annual budget.

The broader Nifty fell as much as 1.52 percent while the benchmark BSE Sensex lost 1.51 percent.

Indian IT stocks such as Infosys Technologies , Tata Consultancy Services fell on Cognizant's guidance.

Shares of Punjab National Bank , India's fourth biggest state lender by assets, lost more than 6 percent after the bank reported lower-than-estimated quarterly earnings.

GAIL was among the gainers, rising ahead of the company's December quarter earnings which are expected to be above estimates, traders said.

Among the midcap stocks, India's local search engine company, Just Dial, traded below its 2013 issue price as traders cited high valuations and competition from global giants as reasons to dump the stock.

(Reporting by Manoj Rawal; Editing by Anupama Dwivedi)