Tech meltdown dents BSE IT index, slips 1.4%

A weak sentiment across Asia for technology scrips washed on to Indian shores, with the BSE IT index ending the day as the biggest loser among indices.

The BSE IT index lost 1.40 per cent, with tech bellwether Infosys Technologies down 2.12 per cent to Rs 1447.65, Wipro down 1.71 per cent to Rs 519.65 and Satyam Computer fell 1.41 per cent to Rs 326.20.

Asian technology shares tumbled on Tuesday as broker downgrades and poor chip gear sales unnerved investors ahead of key US earnings reports.

The Tokyo market, which was closed on Monday for a national holiday, was dragged lower by tech stocks after figures on Monday for equipment used to produce microchips showed weakening North American demand in June.

MSCI's widest index of shares elsewhere in the Asia Pacific dropped 1.2 per cent. Its tech component fell 2.7 per cent to near a one-year low.

Meanwhile, Taiwan's TAIX fell 3 per cent to an 11-month low, South Korea's Kospi fell 1.8 per cent and Hong Kong, Australia and Singapore index fell between 0.6 and 1 per cent.

Analysts said profit taking was seen in IT counters after they had notched gains in the last few sesions on the back of Infosys' good earnings in the June quarter. They added that the IT sector was viewed by the market as one of the least affected by political gyrations.

The sector has also got a lift owing to the upswing in the American economy. In fact, players point out that most big participants are looking to up their exposure to IT though the buzz in the market is that some players will sell in heavyweight technology scrips to make place for the TCS scrip in their portfolios.