IT stocks gain as rupee drops to 2-yr low

Led by Infosys Technologies, shares of IT companies surged by up to 2.74% on the BSE after the Indian rupee fell by 42 paise to a fresh two-year low of Rs 48.23 against the US dollar in early trade today.

Shares of Infosys Technologies, the top Sensex performer in morning trade, jumped by 2.74% to an early high of Rs 2,426.50 on the BSE.

Similarly, the country's biggest software exporter, TCS, rose by 2.72% to touch an early peak of Rs 1,045.50. Wipro, too, rose by 2.47% to Rs 350.

In addition, HCL Tech climbed by 2.30%, Mphasis rose by 1.42% and Tech Mahindra jumped by 1.71%.

Led by gains in these stocks, the BSE IT index was trading 2.41% higher at 5,174.60 at 1015 hours.

The Indian rupee fell amid weakness of the euro as worries over the European debt crisis deepened following Standard & Poor's downgrade of Italy's sovereign rating.

Analysts said large IT companies benefit by weakness in the rupee as it helps in improving their profit margins.

IT companies like TCS, Infosys, Wipro and HCL Technologies earn a major chunk of their revenues from the US in dollars.