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Infosys, TCS Shares See Sharp Fall

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The two giant Indian software companies were the worst performers on Sensex and Nifty on Monday morning.

 

Infosys, TCS Shares See Sharp Fall

Shares of Infosys Ltd fell by nearly 5 percent to Rs 741.90 from its previous close of Rs 805 apiece.

Shares of Tata Consultancy Services Ltd by close to 4 percent to Rs 1,975 on NSE. Its previous close was Rs 2,065.45.

While the reason for the fall in these stocks isn't very clear, it is likely that it was a reaction to a stronger rupee after Finance Minister Nirmala Sitharaman announced measures to improve the economy.

On Friday, Sitharaman proposed lowering the corporate tax rate on domestic and local manufacturing companies, making 25.17 percent the effective rate (including surcharges and cess). The domestic currency touched a high of 70.67 against the US dollar on the same day and BSE's Sensex zoomed as much as 2,284.55 points to 38,378.02.

On the other hand, shares of Infosys and TCS closed lower by 1.91 percent and 1.74 percent on Friday.

The Indian rupee generally moves in the direction of the stock markets.

A stronger rupee is bad news for IT companies like Infosys and TCS, which make a significant part of their revenue in dollars from their international clients, thus making these stocks less attractive to traders.

On Monday, the rupee opened lower by 14 paise at 71.08. Sensex jumped as much as 3.5 percent or 1,331 points to 39,346. NSE's Nifty 50 also surged by 3.5 percent to 11,666.35.

Read more about: infosys tcs
Story first published: Monday, September 23, 2019, 10:23 [IST]
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