Half of the Indian IT stocks traded in red on Monday after a steep global IT selloff and strengthening rupee, with Infosys falling over 2% to a low of Rs 1,134.35,
Oracle Financial Services fell nearly 2% to Rs 10,179, Tech Mahindra Ltd. slipped as much as over 2% to Rs 1,752.70 apiece while Coforge remained choppy.
On the other hand, HCL Technologies Ltd., Tata Consultancy Services Ltd. and Persistent Systems Ltd. traded in the green, after rising as much as 2.9%, 1.4%, and 1.3% respectively.
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Nifty IT index traded 0.4% lower as of 10:09 a.m. IST, compared to a 0.31% decline in the Nifty index on Monday. The broader weakness in the index comes amid a steep global tech selloff.
US equities faced investor pressure on Friday, with magnificent seven giants like Alphabet Inc. and Microsoft Corp. settling over 2% and nearly 2% lower. The tech heavy Nasdaq Composite index fell sharply by 2.14% to close at 26,140.03.
Meanwhile, the Reserve Bank of India has been engaging in selling dollars to provide support to the Indian rupee on the home front according to reports. The rupee rose by 17 paise to trade at 94.79 levels.
A stronger rupee often puts pressure on software services and IT companies in India, as most of their revenues come from overseas nations and is primarily billed in dollar terms.
When foreign clients pay in US dollars, those dollars are converted into rupees for local expenses. Therefore, a stronger rupee would mean each dollar yields fewer rupees, reducing the company's top-line revenue growth in local currency.
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