DBS Vickers expects Singapore's technology sector to be more muted in the first quarter than initially expected as economic uncertainties loom and margins are weak but that Hi-P International Ltd and Amtek Engineering Ltd may turn around.

The sector's core profit in the first quarter is forecast to fall 16 percent from the previous quarter, below the initial expectation for a small rebound, DBS said.

But growth in the 2012 fiscal year remains intact given the continuous recovery in sales and margins going into the second quarter, it said.

"Tech stocks could be lackluster near term but keep watch on Hi-P and Amtek for potential turnaround," it said.

Hi-P shares were up 0.6 percent at S$0.915 and have gained more than 50 percent so far this year. Amtek was 0.7 percent higher at S$0.695 and has risen 17 percent since the start of the year.

1121 (0321 GMT)

(Reporting by Eveline Danubrata in Singapore; eveline.danubrata@thomsonreuters.com)