Nine IT stocks rose by 0.61% to 3.21% at 11:49 IST on BSE on weak rupee and improving outlook in the US economy.
Hexaware Technologies (up 3.21%), Wipro (up 2.54%), TCS (up 2.26%), Tech Mahindra (up 1.71%), MphasiS (up 1.62%), Oracle Financial Services Software (up 1.45%), Infosys (up 1.38%), HCL Technologies (up 1.37%) and CMC (up 0.61%), edged higher.
The S&P BSE IT index was up 1.79% at 8,822.92. It outperformed the Sensex, which was down 0.04% at 21,824.35.
The S&P BSE IT index had underperformed the market over the past one month till 19 March 2014, sliding 8.91% compared with the Sensex's 5.36% rise. The index had also underperformed the market in past one quarter, falling 2.66% as against Sensex's 5.43% rise.
Rupee edged lower against the dollar. In the foreign exchange market, the rupee edged lower against the dollar tracking weakness in Asian equities. The partially convertible rupee was hovering at 61.15, compared with its close of 60.95/96 on Wednesday, 19 March 2014. A weak rupee boosts revenue of IT firms in rupee terms as the sector derives a lion's share of revenue from exports.
Meanwhile, improving economic outlook of US also aided gains in IT stocks. On Wednesday, 19 March 2014, the Federal Reserve continued tapering bond purchases and hinted at rising interest rates by next year. US is the biggest outsourcing market for the Indian IT firms.
The Federal Reserve gave itself room to keep borrowing costs low at least until next year by dropping a linkage between the benchmark interest rate and a specific level of unemployment. The US Federal Reserve will probably end its massive bond-buying programme this fall, and could start raising interest rates around six months later, Fed chairwoman Janet Yellen said on Wednesday, 19 March 2014. "We know we're not close to full employment, not close to an employment level consistent with our mandate, and unless inflation were a significant concern, we wouldn't dream of raising the federal funds rate target," Chair Janet Yellen said on Wednesday after her first time leading a meeting of the Federal Open Market Committee.
In deciding how long to keep rates low, the committee will look at a "wide range of information," including labor market conditions, inflation expectations and financial markets, she said. The Fed also reduced the monthly pace of bond purchases by $10 billion, to $55 billion on Wednesday.
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