Sliding rupee helps BSE IT index buck weak market trend

Weakening of the rupee against the dollar has helped IT stocks buck the general weak trend in the stock markets on Friday. BSE IT was the only index among all the major and sectoral indices on Friday to close on a positive note.

The BSE IT index gained 40.28 points or 0.85% to close at 4,774.13 points as against the Sensex, which dipped by 231.90 points or 1.54% to close at 14,868.25 points.

According to an analyst from a domestic brokerage firm, IT stocks rallied because of the weakening of the domestic currency, which closed at Rs 40.65/66 against the previous day?s quote of Rs 40.53/54.

The BSE IT opened at 4,619.95 points in the morning and touched a high of 4,787.16 points. It traded low at 4,572.70 points in the intra-day trading. A total of 32 lakh shares with a cumulative value of Rs 246.18 crore were traded.

The analyst said that IT stocks were battered heavily in last couple of months after rupee started appreciating against the dollar. But, weakening of the rupee helped the IT stocks to rebound.

However, global concerns and rising inflationary figures impacted some of the sectoral indices more than the benchmark index. The BSE PSU shed 1.99% or 140.34 points to end at 6,918.67 points. The BSE Bankex dipped 2.53% or 201.77 points at 7,773.71 points.

Inflation quoted for the week ended in July 28 was 4.45% as against the market expectation of 4.41%. This has weakened the investors? sentiments towards the bank stocks.

Commenting on the market scenario, Guy Strapp, regional head of investment management, Asia, Prudential Asset Management, said the inflationary trend may be put under watch. However, inflation may not be a major concern because the economy is giving good returns. He said that there is a strong topline growth. The FDI continues to flow into the economy, helping the situation from not worsening, he said.

Among other sectors, realty stocks continue to head southwards. The BSE Realty index dipped by 2.47% or 184.30 points at 7,263.54 points. Similarly, the BSE Metal dipped by 2.3% or 255 points to close at 10,863.61 points.