Shares of information technology companies underperformed the benchmark index in a euphoric market on Monday, as rupee saw a sharp appreciation during the day.
The local currency strengthened by 47 paise to open at Rs 82.99 against the US dollar. This is rupee's highest since March 19, on account of India's GDP rising to 7.8% in the January-March quarter and the exit polls predicting a return of the Modi government.
Notably, Indian IT companies' stock prices have an inversely proportional relationship with rupee movement. Meaning, when the rupee appreciates against the US dollar, IT stocks are under pressure as it translates to software exports becoming less competitive.
While India's stock gauges hit a fresh high during the day, Nifty IT rose by a mere 0.5%, as of 11:33 a.m. Intraday, Nifty surged 2.59% to a fresh high of 23,338.7, while Sensex rose 3.76% to a new high of 76,738.8.
LTIMindtree Ltd.'s shares were trading 0.74% lower. Shares of Wipro Ltd. and Tech Mahindra Ltd. were trading over 1%, whereas Tata Consultancy Services Ltd. and Infosys Ltd. stocks were marginally higher.
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