Sensex down 536 pts, Nifty below 11,000-mark; Is this the reason for gains in IT stocks, find out
Except IT stocks, everything finished on negative note with banking and auto stocks emerging as worst performer.
Where everything was going bleak and hot in benchmark indices like Sensex and Nifty 50, it was IT stocks who were best performer on these exchanges. The trend was very weird, because the gains in IT stocks were not marginal but hefty. The Sensex ended at 36,305.02 below 536.58 points or 1.46%, while the Nifty 50 finally gave away its 11,000-mark and finished at 10,967.40 down 175.70 points or 1.58%. Except IT stocks, everything finished on negative note with banking and auto stocks emerging as worst performer.
S&P BSE IT index soared over 318.12 points or 2.06% ending at 15,787.79, while S&P BSE Teck jumped over 105.76 points or 1.37% finishing at 7,829.16.
On the other hand, Nifty IT rose by 2.16% completing at 16,175.30.
On BSE IT index, the gainers were Infibeam taking top spot by surging nearly 20% at Rs 216.60 per piece. This company was joined by IT-giant TCS on second place which grew by 4.51% ending at Rs 2198.70 per piece.
Other stocks which gained were - Ramco System at Rs 334.45 per piece above 3.61%, L&T Infotech at Rs 1899 per piece up 2.42%, 3I Infotech at Rs 3.66 per piece up 2.23% and Infosys at Rs 717.30 per piece up 1.563%.
Companies like Hexaware, Cyient, HCL Tech, Persistent, Tech Mahindra and NIIT Tech were also in the list of gainers by rising in the range of 0.60% to 1.31%.
It's all about opportunities in the midst of hay way when it comes to market, and IT stocks are currently that one investment platform for investment in equities. The reason why IT stocks preferred would be weak Indian rupees against US benchmark dollar index.
The domestic rupee today retreated a low of 72.73 against the US dollar beset investors.
Earlier Goldman Sachs said, for investors concerned about the risk of further INR depreciation, we highlight stocks that would benefit from/be hurt by a weaker INR.
The financial service provider said, “INR depreciation beneficiaries” are largely exporters (Tech, Pharma) and Autos, which would benefit because a high proportion of their revenues are linked to USD.”
Among the tech stocks listed out by Goldman were - Infosys, Tech Mahindra, MPhasis, TCS, Wipro and HCL Technologies. These stocks at least have about 30% of their revenues coming from outside India. Therefore, weaker rupee paves the way for good earnings.