IT stocks on Friday fell by as much as 3 per cent in an otherwise strong stock market after sentiments turned bearish as the rupee rose by 50 paise to end at 58.79 against the US dollar.
From the blue-chip IT scrips, Infosys was down by 2.83 per cent, while Wipro lost 2.61 per cent and TCS fell by 1.64 per cent at the BSE. Shares of HCL Tech were down 2.77 per cent, while Hexaware Technologies lost 0.25 per cent.
Led by the fall in these stocks, the BSE IT index lost 2.22 per cent to settle at 8,642.14.
“We can expect export driven stocks to remain flat as the rupee possibly strengthens and IT firms realise that other sectors are bound to fare better under the new government’s economic policies,” said Raghu Kumar, Cofounder, RKSV.
Narendra Modi-led BJP’s historic victory today lifted the rupee to an 11-month closing high of 58.79 against the US dollar.
“IT stocks were looking weak today as the rupee has strengthened against dollar, trading around 59 level,” said Rakesh Goyal, Senior Vice President, Bonanza Portfolio Ltd.
Big IT companies earn a major chunk of their revenues in dollar from their US clients. Large IT companies benefit from a weaker rupee, as it positively impacts their profit margins.