The NSE's Nifty IT Index extended its decline for the fourth day and could be heading for its longest losing streak in four months due to the strengthening Indian rupee. Shares of IT companies like Infosys and TCS and those in the pharma sector like Sun Pharma were weighing on BSE's Sensex and NSE's Nifty with their losses in the morning session today.
Indices of both the industries (Nifty IT and Nifty Pharma) were seen trading lower in the early afternoon hours. All the stocks listed on Nifty IT, including Tech Mahindra, Infosys and HCL Tech were red.
The rupee gained for the eighth straight trading day and appreciated as much as 0.55 percent to 70.30 against the US dollar on Monday morning, hitting its three-month high. The forex and stock markets were closed on Friday on account of Guru Nanak Jayanti.
The domestic currency gained 77 paise on Thursday to end at 70.69/dollar from softening oil prices and weakening of some prominent currencies like the US dollar and euro. In the last 7 sessions, the currency gained 200 paise against the dollar.
A significant part of IT and Pharma companies' income is made in US dollars from their overseas sales. A stronger rupee against the dollar can affect their profits.
The rupee has now erased its gains in the afternoon session trading at 70.67/dollar level.