BSE IT index hits record high on rupee slide, Infy, HCL Tech surge

NEW DELHI: Stocks of export-oriented sectors such as information technology (IT) and pharma saw a buying spree in an otherwise weak trading session for equities on Wednesday, following a sharp slide in rupee against the US dollar.

A fall in rupee increases the competitiveness of domestic exporters, especially the ones from the IT sector, which derives over half of their revenues in dollar terms.

Infosys rose over 3 per cent. Sonata Software, CMC, HCL Tech and TCS gained between 2 per cent and 2.6 per cent.

Wipro, Tech Mahindra and Geometric advanced between 1.4 per cent and 1.9 per cent.

“Rupee depreciation has been the key reason why stocks of export-led sectors are seeing momentum today. But, we expect the Reserve Bank of India to intervene and not let rupee fall drastically over here. As far as the Q1 numbers by IT firms are concerned, they were in line, given that there were already low expectations from the results,” said market expert Ambareesh Baliga.

Rupee dropped 34 paise on Tuesday and was testing its September 2013 lows on Wednesday following China’s latest move to devalue yuan in a bid to get its economy back on track.

The domestic currency hit a day's low of Rs 64.94 on Wednesday.

Meanwhile, the BSE Healthcare index, was up 1 per cent. Claris Life, Jubilant Life, Sun Pharma were up 5.5 per cent, 5 per cent and 4 per cent, respectively. Lupin advanced 1.49 per cent.