The May futures of Infosys Technologies and TCS declined by 4.7 per cent each due to a built-up in short positions on Thursday and Friday. The futures of Satyam Computer declined by 3.3 per cent, while those of HCL Technologies and Patni Computer fell by over two per cent each due to profit booking.
i-flex Solutions and KPIT Cummins fell by over six per cent each largely due to a built-up in short positions during the week.
The shares of i-flex Solutions declined by 6.3 per cent and the open interest increased from 6.3 lakh shares to 6.7 lakh shares. KPIT Cummins declined 6.1 per cent, while the OI rose from 6.9 lakh shares to 8.83 lakh shares.
The sell-off in technology stocks was largely due to poor guidance from Cognizant for the second quarter ended June 2008. The company guided 2Q revenue growth at 6 per cent, which was below street expectations. However, it maintained its full year revenue guidance at 38 per cent.
This was no surprise, considering that front-line Indian IT companies had already guided a relatively weak June quarter. Cognizant registered a modest quarter-on-quarter growth in the BFSI (banking finance services and insurance) segment, while cautioning about roadblocks. Infosys and TCS had already highlighted the challenges ahead.
More From This Section
Indian technology stocks have been re-rated substantially in the last one month. The BSE IT index outperformed the Sensex between April 11 and May 7 by posting 20.6 per cent returns against the benchmark's 9.7 per cent.
The better-than-expected fourth quarter performance of Infosys, besides tax benefit extension and rupee depreciation, had boosted the stock performance of Indian IT companies.