IT stocks gain on weak rupee

Six IT stocks rose by 0.24% to 2.67% at 12:08 IST on BSE after rupee weakened against the dollar today, 20 September 2013.

HCL Technologies (up 2.67%), Tech Mahindra (up 2.01%), Wipro (up 1.50%), CMC (up 0.46%), Hexaware Technologies (up 0.44%) and TCS (up 0.24%), edged higher.

However, MphasiS (down 4.85%), Oracle Financial Services Software (down 0.65%) and Infosys (down 0.45%), edged lower.

The S&P BSE IT index was up 0.34% at 7,845.64. It outperformed the Sensex, which was down 2.48% at 20,134.62.

The S&P BSE IT index had underperformed the market over the past one month till 19 September 2013, rising 4.72% compared with the Sensex's 12.78% rise. The index had, however, outperformed the market in past one quarter, rising 29.11% as against Sensex's 7.28% rise.

In the foreign exchange market, the rupee fell against the dollar in choppy trade after the Reserve Bank of India (RBI), in a surprise decision, raised its key policy rate viz. the repo rate by 25 basis points (bps) to 7.5% from 7.25% after mid-quarter monetary policy review announced at 11:00 IST.

The partially convertible rupee was hovering at 62.22, sharply lower than its close of 61.77/78 on Thursday, 19 September 2013. The rupee had surged on Thursday boosted by the US Federal Reserve's surprise decision to keep its $85-billion-a-month in bond purchases intact.

A weak rupee boosts revenue of IT firms in rupee terms as the sector derives a lion's share of revenue from exports.

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