Share market crash: Why are IT stocks shining when Dalal Street is in red?
India Today
A look at Sensex stocks shows that IT names such as HCLTech, Tech Mahindra, and TCS were trading in the green, even as heavyweights across banking, auto, metal and consumption sectors saw sharp declines.
The stock market remained under pressure on Monday, with benchmark indices and most sectors trading in the red amid rising global uncertainty, high crude oil prices and a weakening rupee. However, in the middle of this broad sell-off, IT stocks stood out as the only pocket of strength.
A look at Sensex stocks shows that IT names such as HCLTech, Tech Mahindra, and TCS were trading in the green, even as heavyweights across banking, auto, metal and consumption sectors saw sharp declines. This is a clear contrast to the overall market trend, where stocks like HDFC Bank, ICICI Bank, Larsen & Toubro, Tata Steel and Titan were among the major losers.
The trend is also visible at the index level. As of around 2:35 pm, the Nifty IT index was almost flat, down just 0.04%, making it the best-performing sector on the NSE.
In comparison, other sectors saw much deeper cuts. Nifty Metal was down 4.98%, Nifty Consumer Durables fell 5.26%, Nifty Realty declined 4.61%, and Nifty PSU Bank dropped 3.83%. Most other sectoral indices were down between 2% and 4%.
The biggest reason behind the resilience in IT stocks is the sharp fall in the rupee.
The rupee has weakened to record low levels against the US dollar, which directly benefits IT companies. Firms like TCS, Infosys, HCLTech and Tech Mahindra earn a large share of their revenue in dollars. When the rupee weakens, their earnings translate into higher rupee income, supporting margins.
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