The sector has seen a high degree of value erosion and the top scrips have lost on an average 22.81 per cent from the sensex's recent peak level on September 12, 2000.

The index has slid from its 45 day peak of 4763.63 points to below 4000 points closing at 3945.28 on Tuesday (October 10, 2000). The downtrend was due to an across-the-board fall in prices of both new and old economy stocks. Since the new economy stocks, especially information technology, rule the roost on the bourses, their fall has been more significant.

The index heavyweight Infosys Technologies has been the most stable stock during the turmoil, losing only 17.61 per cent against the sensex's fall of 17.18 per cent. The other major losers include SSI (27.69 per cent), Wipro (25.81 per cent), NIIT (25.08 per cent) and Satyam Computers (23.96 per cent).

Other scrips that saw heavy losses include Kale Consultants (42.59 per cent), Polaris Software (42.50 per cent), DSQ Software (36.49 per cent), Hughes Software (32.13 per cent) and HCL Infosystems (32.13 per cent).

According to Mr Vijay Bhushan, a Delhi-based broker, "The IT sector has always been more volatile than the markets. This time the sector has made the markets to decline even below the 4000 mark." Indian bourses have been taking cue from the Nasdaq, which has been plagued by falling earnings of top American IT companies like Apple and Intel. Rising oil prices have been adding fuel to the fire, leading to a worldwide depression in sentiments.

Internal factors like fear of a political crisis, depreciation in the rupee and economic slowdown have also been the cause of weak sentiments on the bourses.

The markets turnovers in this sector have also seen a significant erosion as the investors are sceptical and playing a wait and watch game currently.

Investors, specially, FIIs and mutual funds have suffered heavy losses. Most of the mutual funds specially in the private sector, which had build heavy positions on IT scrips, have suffered tremendously with this erosion in values. During the recent weeks, FIIs have been liquidating their positions at software counters.

Recently, IT majors Infosys and Satyam had declared high growth in revenues during the second quarter on October 10. Do the current valuations and good results present opportunities for select pickings? Mr Bhushan feel otherwise, "The bears are in tight control of the markets and the sensex is expected to decline upto 3500 to 3600 points. Under such circumstances, I would not recommend any purchases despite brilliant financial results of both Infosys and Satyam."