IT stocks fall on growth outlook worries

IT Stocks

Shares of IT companies today fell by as much as 3 per cent on growth outlook worries, triggered by a Cognizant filing in a US exchange.

Infosys shares ended 1.84 per cent lower at Rs 2,338.50 on BSE, becoming the top loser among the 30-Sensex blue-chip scrips.

TCS was down 1.14 per cent, while Wipro lost 0.33 per cent.

Among others, Hexaware Tech plunged 3.01 per cent, while HCL Tech fell by 2.03 per cent and Tech Mahindra (0.61 per cent).

Led by losses in these stocks, the BSE IT index settled at 5,700.25, down 1.37 per cent and was the biggest dampener among 13 sectoral indices.

"A weaker dollar coupled with the interpretation of Cognizant's US SEC filing, triggered fears of slow revenue growth in 2013 for IT. Selling pressure was evident in several IT scrips following the news," Milan Bavishi Head Research Inventure Growth & Securities said.

Nasdaq-listed IT firm Cognizant, which follows January-December fiscal, has guided its revenue in 2012 to be at least USD 7.34 billion (up at least 20 per cent compared to 2011). This was a downward revision from earlier in the year, when the company had hoped to grow at 23 per cent.

Cognizant's revenue in 2011 stood at USD 6.12 billion.

Cognizant has been growing faster than some of its Indian counterparts over the last few quarters and a lower growth target may come as a dampener for Indian IT sector, which is already seeing flat IT budgets and increased cost of operations.

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