Mumbai : In tandem with upmove in stocks, the rupee gained for the fourth day and closed at a fresh 11-month high of 58.59 against the US dollar on sustained inflows. Continued dollar selling by exporters and banks also boosted rupee sentiment, a forex dealer said.
Information technology stocks were the worst hit as the rupee strengthened. Wipro, Infosys, HCL Technologies and Tata Consultancy Services ended down 4.1-5.7%.
Shares of TCS, the country’s most valued firm declined by 5.69 per cent to settle at Rs 2,034.70 on the BSE.
Shares of Tech Mahindra plunged 4.66 per cent and Hexaware Technologies fell by 1.39 per cent.
Tracking losses in these stocks, the BSE IT index fell by 4.95 per cent to settle at 8,214.41. “Export oriented stocks like Pharma and IT were hit hard on weak rupee,” said K K Kavikondala, CEO, WealthRays Securities.
The rupee is likely to remain rangebound against the dollar without being too strong or weak, Finance Secretary Arvind Mayaram said. “Lot of companies that have taken forward position will square off the position. Therefore, the rupee will remain rangebound. It will neither become very strong nor weak… Volatility of both sides is bad,” Mayaram told reporters.
The rupee has been appreciating against the dollar for the last one week on hopes that the new government led by Bharatiya Janata Party will push reforms.
Mayaram also said the Reserve Bank of India needs to continuously watch India’s foreign exchange reserves.
Tirupur exporters urge RBI to step in
Expressing concern over the rupee strengthening against the dollar, knitwear exporters of Tirupur sought immediate intervention of the RBI to arrest the domestic currency’s gains. In a letter to RBI Governor Raghuram Rajan, Tirupur Exporters’ Association (TEA) president A Shaktivel said, “The appreciation of the rupee against the dollar would upset the apple cart of Tirupur knitwear export units and lose its competitiveness in the tough global market”.