IT stocks decline tracking strength in rupee

Key benchmark indices continued to hover in negative zone in early afternoon trade. At 12:26 IST, the barometer index, the S&P BSE Sensex, was down 72.63 points or 0.24% at 29,854.71. The Nifty 50 index was down 19 points or 0.21% at 9,242.95. Market sentiment was subdued as US fired dozens of cruise missiles into Syria.

The BSE Mid-Cap index rose 0.33%. The BSE Small-Cap index advanced 0.41%. Both these indices outperformed the Sensex.

The breadth, indicating the overall health of the market, was positive. On the BSE, 1,464 shares rose and 1,168 shares declined. A total of 133 shares were unchanged.

Power generation and power distribution stocks declined. Reliance Infrastructure (down 0.78%), Torrent Power (down 0.73%), Power Grid Corporation of India (down 0.63%), NHPC (down 0.61%), Adani Power (down 0.56%), Tata Power (down 0.52%), Reliance Power (down 0.1%) and CESC (down 0.07%) edged lower. JSW Energy (up 0.67%), NTPC (up 0.63%) and GMR Infrastructure (up 0.01%) edged higher.

IT stocks edged lower as rupee strengthened against the dollar. Infosys (down 1.01%), Wipro (down 0.78%), HCL Technologies (down 0.21%) and Tech Mahindra (down 0.27%) declined. TCS (up 0.43%) edged higher.

In the foreign exchange market, the partially convertible rupee was hovering at 64.42, compared with closing of 64.53 during the previous trading session.

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

Among other stocks, Phoenix Mills gained 4.28% to Rs 420 after a foreign brokerage reportedly upgraded the stock with buy rating and raised its target price to Rs 539.

Overseas, Asian stocks were mixed. US equities closed well off session highs yesterday, 6 April 2017, after Trump said he's willing to act alone on North Korea if China does not step up.

Meanwhile, US fired dozens of cruise missiles into Syria. The missile strikes happened as President Donald Trump hosts Chinese President Xi Jinping at his Mar-a-Lago resort in Florida.

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