IT shares trade weak on strong rupee
Shares of information technology (IT) companies were trading weak in otherwise firm market as the Indian rupee strengthens further against US dollar.
Tata Consultancy Services (TCS), Infosys, HCL Technologies, Wipro and Tech Mahindra were down in the range of 1%-2% on the National Stock Exchange (NSE).
At 10:13 am; Nifty IT index, the sole loser among sectoral indices, was down 1.3% as compared to 0.13% gain in the benchmark Nifty 50 index.
The Indian rupee strengthened for the third session to hit a fresh 16-month high against the US dollar. At 10.20 am, the rupee was trading at 65.47, up 0.53% from its previous close of 65.82.
On Tuesday, the rupee surged by a massive 78 paise to end at a nearly one-and-a-half year high of 65.82 against the US dollar on frantic unwinding of the American currency following BJP's emphatic victory in Uttar Pradesh.
A firm rupee adversely impacts the operating profit margin of IT firms as the sector derives a lion's share of revenue from exports.
Meanwhile, thus far in the calendar year 2017, Nifty IT index has underperformed the market by gaining 3.3% against 11.2% rise in the Nifty 50 index.