There was widespread selling in techs as concerns over the impact of a prolonged war on the fortunes of the sector plagued the market on Monday.

All six frontline software scrips declined in morning trades - Wipro (down 2.29% to Rs 1,385.15), HCL Technologies (down 2.75% to Rs 161), Satyam Computer (down 2.37% to Rs 205.95), Infosys Technologies (down 0.99% to Rs 4,406.55), Digital GlobalSoft (down 2.16% to Rs 647.60) and i-flex Solutions (down 1.18% to Rs 936).

In fact, news reports now show that US and allied troops are meeting with unexpected and stiff resistance as they sweep towards the Iraqi capital Baghdad. And, how the war shapes up will determine the trend on the bourses in the next few sessions. Dealers say tech stocks could wilt now as these had made good strides on initial war-related euphoria. Techs commanded much buying over the last few sessions on anticipation that the war would not disrupt the global economy significantly.

In three sessions between 17 and 21 March 2003, the BSE IT Index rose 8.2% or 110.02 points to 1,450.44 from 1,340.42. In 10 prior sessions between 28 February and 17 March 2003, in fact, the same index had lost 163.58 points or 10.87% from 1,504 on uncertainty over war.

The earlier fall in the IT Index precipitated on concerns that war could disrupt order inflows from the US and Europe. The Indian IT sector receives over 65-75% of its export revenues from the US. News reports had also indicated that IT spending by major US companies was sluggish in February 2003, with a rise of just 4.3%, below the December 2002 rate of 5%. This was significantly below expectations of 6-7% growth.

Last week, the National Association of Software and Services Companies said that a short war on Iraq would have no impact on India's information technology sector. However, if the war was prolonged, it would definitely impact the world economy, which could slip into recession, Nasscom said. It also said that global companies were outsourcing to India because the country offered the best proposition for outsourcing, with better quality and productivity at low cost.

Meanwhile, second line software stocks also lost on Monday - Trigyn Technologies (down 4.30% to Rs 14.45), VisualSoft Technologies (down 2.98% to Rs 166.20), Polaris Software (down 3.80% to Rs 134), Mascot Systems (down 2.26% to Rs 112.50), Hexaware (down 3.73% to Rs 116.25) and Hughes Software (down 3.59% to Rs 177.40).