IT stocks gain up to 3% intraday as Indian Rupee's weakness versus US Dollar continues

Shares of information technology (IT) companies were trading firmly on Tuesday, witnessing a departure from the overall market movement which remained in the red for the greater part of today's trading session. 

The stocks found strength in a weak rupee against the US Dollar. The IT services companies, which make most of their revenues servicing US clientele tend to benefit from a weaker rupee, experts believe. 

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The rupee hit a lifetime low in opening trade on Monday as a sharp surge in international crude oil prices threatened to push up imported inflation and widen the country's trade and current account deficits, Reuters reported. 

The Nifty IT Index jumped almost 2.5 per cent to become top sectoral gainer intraday as compared to 0.6 per cent fall in the Nifty50 Index on Tuesday at around 01:46 pm.  

IT heavyweights such as Tata Consultancy Services, Infosys, Tech Mahindra, Wipro, HCL Technologies are the key top gainers on Nifty index, each up between 1.5-2.5 per cent intraday today. 

Meanwhile, mid and small-cap IT stocks such as LTTS, Mindtree and L&T Infotech each gained between 2-3 per cent intraday today, while Coforge and Mphasis surged over 1 per cent in the Nifty IT index. 

On the back of robust upcoming quarterly results and outlook once again reaffirm strong demand for IT Services, and hence Prabhudas Lilladher Stock Broking firm continue to maintain Overweight stance on the sector. 

Besides, the IT giant TCS’ buyback opens tomorrow on March 9, 2022, which and the stock is one of the top gainers on Nifty50 list. It is having a cascading effect on other IT heavyweights to surge. The company said its Rs 18,000 crore share buyback offer will open on March 9 and close on March 23.