Investors breathed a sigh of relief on February 17 as the benchmark indices closed in the green on February 17. However, on February 18, the benchmark pared the gains as the 30-share Sensex hit an intraday low at 75,531.01 levels down by 0.61 per cent and the Nifty 50 fell 0.68 per cent to trade at an intraday low of 22,801.5 levels. All major sectoral indices also traded in the red apart from the Nifty IT index which traded in the green.
As many as 7 out of the 10 constituents of the index traded in the green at the time of writing this story. The index managed to gain 1.06 per cent or 41073.2 to hit an intraday high at 41,511.55 levels.
Why Did Nifty IT Buck The Trend
Shares of major Indian IT companies which are a part of the Nifty IT index such as LTI Mindtree, Tech Mahindra, Wipro, HCL Tech and Infosys traded higher by up to 4 per cent on the NSE on February 18. The stocks rallied as the Indian rupee weakened against the US dollar.
The Indian rupee opened 5 paise lower on February 18 compared to its previous close of Rs 86.809 per US dollar. With the rupee opening at Rs 86.835, it is looming close to its all-time low of Rs 87.14 per US Dollar. However, the strengthening of the US Dollar against the Indian rupee can potentially increase the earnings of US-faced industries which earn in US Dollars such as the information technology-enabled services industry (ITes). This potential spurt in earnings can positively impact stock prices.
Persistent shares gained the most among all the constituents of the index. The company’s stock gained nearly 4 per cent to hit an intraday high of Rs 5,747.45 apiece on the NSE. Other stocks which gained in today’s trade include LTI Mindtree which traded higher by 3.15 per cent to hit an intraday high at Rs 5645 apiece on the NSE. L&T Technology Services stock also gained over 2.31 per cent to trade at Rs 4,928.6 apiece. Shares of key IT sector players such as Tech Mahindra, Wipro and Infosys also recorded minor gains.
While seven constituents of the index traded in the green, three stocks declined. Shares of Tata Consultancy Services, Mphasis and Coforge fell by as much as 1.83 per cent on the NSE.
Notably, the Nifty IT index has closed in the red for seven straight sessions from February 7 to February 17. In these seven sessions, the index has declined by nearly 4.3 per cent or 1,848.45 points. At the time of writing this news, the index traded at 41,258.85 levels up by 0.45 per cent.
