This was a sorry week for all stocks, with IT stocks hit the most. Needless to say IT funds took the brunt among all other growth funds.

Open-ended, IT Funds	NAV (Rs)	Last week	Last month	Last year	Since inception
Sun F&C Emerg Tech (Gr)	6.9	-5.70%	-13.20%	0.00%	-19.40%
K Tech	7.71	-6.00%	-13.70%	0.00%	-1.60%
Chola Freedom Tech (Cum)	16.08	-6.00%	-14.30%	8.10%	20.10%
Magnum Sector Funds-IT	15.77	-6.20%	-11.70%	0.00%	121.00%
K P Internet Opport.(Gr)	8.09	-6.40%	-13.80%	0.00%	-15.60%
K P Infotech (Gr)	28.76	-6.70%	-15.60%	146.40%	157.50%
Tata IT Sector Fund	12.09	-6.80%	-18.40%	71.20%	25.20%
Pru ICICI Tech. (Gr)	5.86	-7.10%	-18.30%	0.00%	-40.40%
UTI Sector- Software	22.18	-7.40%	-18.80%	0.00%	70.00%
DSP ML Tech.com (Gr)	8.66	-7.70%	-18.10%	0.00%	1.40%
Alliance New Millenn (Gr)	8.36	-8.00%	-20.70%	0.00%	-45.30%
Birla IT Fund (Gr)	19.43	-8.30%	-19.00%	59.50%	14.60%
IL&FS eCOM Fund (Gr)	6.54	-9.80%	-21.10%	0.00%	-52.00%

All IT funds were in the negative over the week as well as the month. The mood in IT stocks is largely downbeat and the reasons are not hard to find. Consider this, on July 11, 2000, India's two leading lights in software, Infosys and Satyam declared their 1QFY2001 results. While Infosys net surged by 109%, Satyam wasn't too far behind with a 90% growth in net profit.

However despite the exceptional results, both these stocks declined since the announcement. Infosys fell by Rs 900 fall in just about 8 days. Again, Satyam did not lag too far behind, as it crashed by over Rs 500 in less than a week. The reason behind the non-performance of these stocks was the fact that the markets had already factored in their results. So the results although exceptional absolutely, were considered ordinary relatively.

With the hike in the cash reserve ratio (CRR) and the bank rate by the RBI last week, there is increasing downward pressure on stocks. This is unlikely to make the going any better for IT stocks. IT valuations continue to remain suspect and the NASDAQ has been witnessing a lull at around 4,000 points, with many analysts of the opinion that even this level could be broken.

Investors need to reassess their position in IT funds. Over the short term, stock markets look increasingly lackluster, and there is no reason to believe that IT stocks will be any different.

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