IT stocks attracted robust demand on Monday, rising by as much as over 2 per cent, on hopes that the rupee's weakness will boost dollar revenues of the software firms.
Among blue-chip IT stocks, Wipro rose by 2.12 per cent to close the day at Rs 342.70 and was the top gainer among the 30-Sensex components. Infosys rose by 1.64 per cent, while TCS gained 0.19 per cent.
Similarly, HCL Tech went up by 1.24 per cent, Tech Mahindra (0.44 per cent), Hexaware Tech (0.65 per cent) and Mahindra Satyam (0.24 per cent).
The rupee on Monday sank by a staggering 110 paise to hit life-time low of 58.16 against dollar, which saw investors increasing their bets on the IT sector. Since April 30, the
rupee has depreciated by over 8 per cent against the dollar.
Following the gains in these stocks, the BSE IT index ended the day at 6,200.13, up 1.01 per cent and was the top gainer among the 13 sectoral indices.
"Given the current complex macroeconomic happenings, one could take a view on the Rupee with a depreciation bias. Although it has already weakened considerably, there are
expectations of a further weakening trend and a stronger Dollar Index would cause majority of the weakness," said Reena Rohit, Chief Manager-Non Agri Commodities & Currencies, Angel Broking.
The fall in the rupee versus the US currency is broadly seen as a positive factor for export -focused IT sector.
Last Friday, IT stocks had gained 1-2 per cent after the rupee closed below the 57-mark for the first time in one year.
Analysts said large IT companies benefit from a weaker rupee, as it positively impacts their profit margins.
Big IT companies earn a major chunk of their revenues in dollar from their US clients. In a flat stock market, the BSE benchmark Sensex ended the day 11.84 points higher at 19,441.07.