IT stocks drop on firm rupee

Shares of six IT companies dropped by 0.2% to 2.27% at 12:25 IST on BSE after rupee appreciated against the US dollar.

Meanwhile, the S&P BSE Sensex was up 344.77 points, or 1.04% to 33,451.59. The S&P BSE IT index was down 110.32 points, or 1.01% to 10,772.32, underperforming the Sensex.

HCL Technologies (down 1.14%), TCS (down 0.68%), Infosys (down 1.71%), Oracle Financial Services Software (down 0.26%), Tech Mahindra (down 2.27%) and Wipro (down 0.2%) edged lower.

The BSE IT index had outperformed the market over the past one month till 16 November 2017, gaining 4.33% compared with the Sensex's 1.45% rise. The index had also outperformed the market over the past one quarter, rising 6.04% as against the Sensex's 4.2% rise. The index had, however, underperformed the market over the past one year, advancing 15.22% as against the Sensex's 25.89% rise.

In the foreign exchange market, the rupee strengthened against the dollar past 65-mark. The partially convertible rupee was hovering at 64.85, compared with closing of 65.3125 during the previous trading session. Rupee rose on surge in equity indices followed by global credit rating agency, Moody's Investors Service's upgrade of India's sovereign credit rating.

Appreciation in rupee dents top line of IT firms as these companies derive most of their revenues in dollar terms.

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