A sharp setback in the tech-laden Nasdaq composite index on last Friday led to the slide in local tech stocks on Monday amid low volumes.

The fall in tech stocks was also due to uninspiring Q3 results of Wipro, which also gave a cautious future guidance.

All the front-line IT stocks were in the red. Satyam Computer was down 2.3% to Rs 259.70, software bellwether Infosys Technologies was down 1.3% to Rs 4,559, Digital GlobalSoft was down 2.2% to Rs 592.60 and Wipro was down 1.2% to Rs 1,511.

But the slide in IT stocks was on low volumes. Satyam Computer clocked a volume of just 1.7 million shares on the BSE by afternoon as compared to a average daily volume of 5.08 million shares in the last one month and 6.41 million shares in the last one year.

Infosys recorded a volume of just 93,000 shares as compared to an average daily volume of 390,000 shares in the last one month and 319,000 shares in the last one year. Digital GlobalSoft clocked a volume of 440,000 shares as compared to 1.56 million shares in the last one month and 1.33 million shares in the last one year.

The volumes were low because the US markets are closed today on account of Martin Luther King jr. day, dealers said.

A sharp setback on the Nasdaq on Friday affected tech stocks today. US markets have a substantial influence on Indian tech stocks as the local software firms derive a major portion of their revenues (about 50-60%) from America. US-Iraq war fears along with poor guidance by some American firms weakened the US markets last week. Last week, the Dow shed 2.3%, while the Nasdaq lost 4.9%. The S&P 500 lost 2.8%. Last Thursday, Microsoft warned that profit in third quarter and also full year may not meet estimates and described the current business environment as "challenging" -- news that unnerved already edgy stock investors. A similar warning had come from chip-maker bellwether Intel earlier.

Back home, uninspiring Q3 results of Wipro also led to the sluggish trend in tech stocks, dealers said. Wipro announced its Q3 results last Friday. According to US GAAP, Wipro has recorded a 3.75% decline in Q3 (ended 31 December 2002) net profit to Rs 218.1 crore (Rs 2.18 billion) from Rs 226.60 crore (Rs 2.26 billion) in DQ 2001. Revenues increased by 26.3% from Rs 860.2 crore (Rs 8.60 billion) in DQ 2001 to Rs 1,087.1 crore (Rs 10.87 billion) for DQ 2002. The net profit was below market expectations. However, revenues were in line with projections. A capitalmarket.com poll of six software analysts had estimated net profit at Rs 232 to Rs 264.5 crore for the quarter ended 31 December 2002. Sales were projected between Rs 1,061 crore (Rs 10.61 billion) and Rs 1,140.5 crore (Rs 11.40 billion). The revenues of Spectramind (IT-enabled services division of the company) in Q3 were disappointing, being below expectations. Spectramind reported revenues of $ 11.83 million, lower than the projected $ 12.5 million.

For Q4 ending March 2003, Wipro has given a cautious guidance of a small rise in sequential revenues, with projected revenues in the global IT services business pegged at $162 million.

Saytam Computer will come out with its Q3 results this week. Though the company is not expected to come out with good results, analysts said that even if the company manages to meet its own guidance, the market will be satisfied. As per Satyam's own projections made at the time of declaring Q2 results, the company expects a rise in both Q3 revenues and earnings on a sequential basis. It had forecast income from software services of Rs 525-540 crore (Rs 5.25-5.4 billion) as against an income of Rs 499.13 crore (Rs 4.99 billion) in Q2. Earning per share (EPS) is expected to go up to Rs 4-4.20, from an EPS of Rs 3.76.