Infosys hits over 2-year high as IT stocks gain
Mumbai: IT stocks Tuesday gained up to 5 percent, with Infosys rising to over 2-year high, on account of the weakening of the rupee against the US dollar.
Stronger American currency boosts sales of software firms in domestic currency terms. Indian software services companies get over 80 percent of revenues from the US and European markets.
Among blue-chip IT stocks, Infosys gained 2.65 percent to Rs 3,084.90 on the BSE. In the intra-day trade, the stock soared to Rs 3,098.40 - its 28 month high.
Rise in Infosys' counter was also significant in sending the BSE benchmark Sensex higher by 282.86 points at 19,229.84.
The Wipro scrip gained 2.63 percent, while HCL Tech rose by 0.93 percent.
Besides, Tech Mahindra surged 5 percent, Hexaware Tech (0.66 percent) and TCS (0.23 percent).
Led by gains in these stocks, the BSE IT index ended the day 1.76 percent higher at 7,645.26. The index also hit its 52-week high of 7,659.77 during the day.
The rupee recovered to 61.17 against the dollar, compared with yesterday's close of 61.27. It hit a record low of 61.80 to the dollar on August 6, 2013. The domestic currency has lost over 16 percent since April.
Dip in rupee versus the US currency is broadly seen as positive for export-focussed sectors like the Indian IT space. Large IT companies benefit from a weaker rupee, as it positively impacts their profit margins.