Shares of information technology (IT) companies are under pressure on the bourses after the Indian rupee rose to a two-month high after foreign investors increased their investments in Indian debt and equities.
A firm rupee adversely affects operating profit margin of IT firms as companies in the sector derive significant portion of their total revenue from exports. The rupee rose 1.24% to end at 50.73/74 to the dollar on Tuesday, close to its intraday high of 50.70 — a level last seen on November 17, 2011.
The National Stock Exchange (NSE), CNX IT index, the largest loser among sectoral indices is down 2% compared to 0.16% gain the benchmark index S&P CNX Nifty.
Among the individual stocks, TCS has plunged 5% to Rs 1,045, followed by Wipro and Infosys are down 3% each and HCL Technologies by 1.4% on the NSE.
