IT stocks in demand on weak rupee, strong US data

Eight IT stocks rose by 0.52% to 3.05% at 12:03 IST on BSE on positive economic data in US, the biggest outsourcing market for the Indian IT firms.

HCL Technologies (up 1.92%), TCS (up 1.85%), Hexaware Technologies (up 0.52%), MphasiS (up 1.11%), Polaris Financial Technology (up 2.78%), Wipro (up 3.05%), Tech Mahindra (up 1.25%) and Infosys (up 1.48%) edged higher.

TCS rose 1.85% to Rs 1,848.70 after hitting a record high of Rs 1,849 in intraday trade today, 2 August 2013.

The S&P BSE IT index was up 1.57% at 7,560.51 and was the second top gainer among the 13 sectoral indices on BSE. It outperformed the S&P BSE Sensex, which was down 0.08% at 19,301.86.

The S&P BSE IT index had outperformed the market over the past one month till 1 August 2013, rising 20.94% compared with the Sensex's 1.33% fall. The index had also outperformed the market in past one quarter, advancing 30.37% as against Sensex's 0.96% fall.

IT stocks rose on positive economic data in US, the biggest outsourcing market for the Indian IT firms. The Institute for Supply Management's US factory index increased to 55.4 in July 2013, the strongest since June 2011, from 50.9 in June 2013. Readings above 50 indicate expansion.

Meanwhile, weak rupee also boosted IT stocks. The partially convertible rupee was trading at 60.80 against the dollar from Thursday's close of 60.43/44 as strong US data raised the prospects of the Federal Reserve beginning to taper its monetary stimulus this year. The rupee had hit a record low of 61.21 on 8 July 2013. 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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