 "Technology shares gain as rupee hits 2-year low")
Shares of IT companies are trading higher in an otherwise weak market after rupee hit a two-year low, lowest level since Sptember 2013, tracking the devaluation of yuan by the Chinese government.
The devaluation of yuan has impacted all emerging currencies including rupee. China's yuan declined sharply for a second day on Wednesday, after the central bank weakened its yuan and fixed it at 6.3306 against the US dollar on Wednesday.
At 11:15 am, the rupee is trading at 64.81 against the US dollar down by 63 paise, after weakening to as much as 64.86, its lowest level since September 2013, when the country was in the midst of its worst currency turmoil since the 1991 balance of payment crisis.
Previously, the export oriented IT stocks gained the back of strong US job data. The job data is closely monitored by the traders as it reflects the economic growth of the country since strong numbers give room to the Fed for interest rate hike.
An interest rate hike by the Fed would boost the return on assets denominated in dollars, making the currency more attractive to foreign investors and thus helping the export oriented technology stocks.
Among the IT majors, TCS, Wipro, Infosys, KPIT Technology, Mphasis, Hexaware Technologies, HCL Tech, Tech Mahindra, NIIT Tech, Geometric and Mind Tree are trading higher between 0.1-3%. Meanwhile, BSE IT index is up 1.8%. However, the BSE Sensex is down 0.45%.
In addition, reports suggest that most IT majors are in the race for the GST bill IT contract.
In addition, reports suggest that most IT majors are in the race for the GST bill IT contract.