Infotech stocks nosedive for fourth day running

Stocks like Global Tele-Systems, HFCL, Satyam, Pentamedia, Zee Telefilms, Aftek Infosys and Software Solutions have crashed by nearly 60 per cent from their all-time high levels achieved during mid-February. These stocks were investors fancy until last week as most of them were rising 8 per cent almost on a daily basis. “The fall in infotech shares in the last one or two weeks has really scared me,” said an investor who lost Rs 20,000 in one of the ICE stocks.

The dumping in popular speculative infotech stocks continued on Wednesday. The sell-off accelerated with several rumours — such as the arrest of a Big Bull who is active in infotech stocks and that he is in a financial crisis — floating around the market-place. The bear lobby — rivals of the Big Bull — took advantage of the situation and added to the selling-spree.

Adding to the bearish grip, mutual funds — especially those which floated infotech schemes — were seen selling in leading infotech counters to meet the redemption pressure. Investors have even started thinking about pulling out funds from infotech schemes of MFs, analysts said. In fact, the Big Bull has already off-loaded the so-called ICE shares after driving these very prices through the roof all of February and March when they used to hit the eight per cent upper circuit breaker everyday.

If these scrips are fundamentally strong, investors ask, why have they fallen by nearly 60 per cent in the last three weeks? “It is cristal clear that manipulators have been rigging up these stocks. Most of these companies are good companies but market manipulators have taken other investors for a ride. They had pushed up the infotech rates to unrealistic levels,” said an investor.

Recently, the so-called market guru and Templeton emerging markets chief, Mark Mobius, warned that the bull run was over and that infotech shares were overpriced. The same fund, however, was busy buying shares in the infotech companies to create a new portfolio.