IT stocks shine in a dull market; Wipro, HCL Tech rally over 3%

NEW DELHI: The BSE IT index rallied over 1 per cent in trade on Tuesday, supported by a sharp fall in the rupee against the US Dollar ahead of the two-day US Fed meet.

The rally in BSE IT index was led by buying in Infosys, TCS, Tech Mahindra, HCL Technologies and Wipro, which were trading 0.6-4 per cent higher.

The rupee today fell by 60 paise to 63.43 against the dollar in early trade at the Interbank Foreign Exchange market as the US currency gained strength overseas, ahead of the outcome of the Federal Reserve's two-day policy meeting at which it's widely expected to announce a modest reduction in its bond-buying stimulus.

IT stocks have been in some sort of an uptrend so far in the year 2013 supported by sharp depreciation in the domestic currency and signs of revival in global economies such as US and Europe.

At 12:00 p.m.; the BSE IT was trading 1.3 per cent higher as compared to 0.09 per cent rise in the BSE Sensex.

The rally in the IT index was led by Wipro which was up nearly 4 per cent and was also the top gainer on both the BSE Sensex and BSE IT index. The stock was trading 3.9 per cent higher at Rs 468.95.

HCL Technologies was trading 3.1 per cent higher at Rs 1026.1. Tech Mahindra and Tata Consultancy Services were trading higher by 2.8 per cent and 1.3 per cent, respectively.

Infosys has been under pressure so far in the month of September. The stock has corrected nearly 4 per cent so far in the month of September as investors preferred to book profits after 30 per cent rally so far in the year 2013.

If we look at data since January, the BSE IT Index has rallied nearly 35 per cent as compared to 1.6 per cent rise in the S&P BSE Sensex, as of data collected on September 16.

The Indian IT sector earns over 80 per cent of its revenues from the overseas markets. Given this, the heightened prospects of a recovery in the US economy augur well for Indian IT exporters.