As rupee hit an all-time record low earlier on Friday, shares of IT firms surged with Nifty IT index climbing 1.6 percent, accounting for more than half of broader NSE index’s gains. Infosys and Tech Mahindra Ltd shares are up 3.14 percent at Rs 1,358.00 and 2.12 percent at Rs 655.80, respectively on NSE. Tata Consultancy Services (TCS), the country’s biggest IT company by market capitalisation, is up 0.67 percent at Rs 1,994.70, while HCL Technologies shares are up 1.49 percent at Rs 996.70. Wipro, which will report its June-quarter results later in the day, is up 0.23 percent at Rs 285.15. Nifty IT index gained 24.1 percent this year as of last close, compared with the NSE index’s 4.1 percent rise.
The United States is the biggest market for Indian software services exporters and with rupee plunging to record low today, the IT stocks are expected to move more on upside.
After closing at a record low level of 69.05 on Thursday, the Indian rupee slid further by 7 paise to a fresh low of 69.12 against the greenback in early trade on Friday. Sentiments were hurt by the US dollar strengthening to its highest level since July 2017 after Federal Reserve Chairman Jerome Powell expressed confidence in the U.S. economy and affirmed expectations that the central bank was on track to keep hiking interest rates gradually. On Friday, the dollar index against a basket of six major currencies stood little changed at 95.178 after being knocked down from 95.652.
According to analysts, apart from a strong dollar, weakness in the domestic bourses along with persistent outflow of foreign funds continued to dampen the domestic currency. During the week from July 16-19, FIIs have off-loaded funds worth Rs 1,615.36 crore in the domestic markets.