IT stocks near 2-1/2 month low as Infosys disappoints

The BSE IT Index is headed towards a 2-1/2 month low, after bellwether Infosys gave a FY13 guidance that was below market expectations.

Infosys' results show the cyclical factors such as problems with financial clients and structural issues like downward pressure on pricing are big challenges for the industry, brokerage CLSA said.

"In our view, this limits stock performance prospects across the sector," it said in a note to clients.

Infosys, India's No 2 software services exporter, forecast full-year dollar revenue at 8-10%, compared with market expectations for a rise of 10-15%.

Shares in Infosys plummeted more than 10% after the results, while the main Mumbai market was down 0.4%.

The negative sentiment pulled bigger rival Tata Consultancy Services down 4.2%, and third-ranked Wipro dropped 3.5%.

Shares in midcap IT companies like Polaris Financial Technology, HCL Tech, Oracle Financial and Tech Mahindra were down between 1 and 2.8%.