Information technology (IT) company shares were under pressure in an otherwise strong market on Monday due to across-the-board selling in IT stocks, triggered by weakness in heavyweights such as Infosys and Tech Mahindra. At 11:00 am, the Nifty IT index had slipped by 0.5 per cent at 17,970.05. All the information technology stocks were trading in the red, with the exception of Mphasis.
Among individual IT stocks, Tech Mahindra was trading lower by 0.15 per cent at Rs 724.90 and Infosys had shed 0.6 per cent at Rs 924.45 on the NSE. TCS, HCL Tech and Mindtree were also trading lower by around half a per cent on the NSE.
The rupee opened the day lower at 74.91 per dollar as against Friday's closing price of 74.85. The steadiness in the dollar came ahead of the Federal Reserve's annual Jackson Hole retreat, as traders looked for guidance on the U.S. monetary policy.
A firm dollar is considered good for Indian IT companies as they earn a sizeable part of their revenues in US dollars. IT stocks move in tandem with the dollar, gaining strength on strong-dollar days and vice-versa. This day's trading activity on the IT counters is a rare departure from the general tend. One has to keep in mind that the rupee has gained about 3 per cent from the yearly lows touched in April.
The BSE Sensex was trading at 38,629.49, higher by 170 points or 0.7 per cent and the NSE Nifty was at 11,425.85, up 54.60 points or 0.45 per cent at the time.