IT shares tumble on strong rupee

Nine IT shares fell by 1.30% to 5.22% at 12:01 IST on BSE as the Indian rupee strengthened against the dollar.

Hexaware Technologies (down 5.22%), Wipro (down 3.85%), Tech Mahindra (down 3.74%), TCS (down 2.73%), MphasiS (down 2.36%), CMC (down 2.26%), Infosys (down 2.23%), Oracle Financial Services Software (down 1.74%) and HCL Technologies (down 1.30%), edged lower.

The S&P BSE IT index was down 2.83% at 9,436.25. It underperformed the S&P BSE Sensex, which was up 1.30% at 21,792.69.

The S&P BSE IT index had underperformed the market over the past one month till 6 March 2014, rising 5.26% compared with the Sensex's 5.92% rise. The index had, however, outperformed the market in past one quarter, rising 15.32% as against Sensex's 2.46% rise.

In the foreign exchange market, the rupee edged higher against the dollar as equities rose. The partially convertible rupee was hovering at 60.9750, compared with its close of 61.11/12 on Thursday, 6 March 2014.

A firm rupee adversely affects operating profit margins of IT firms as the sector derives a lion's share of revenue from exports.

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