IT stocks declined as rupee surged against the dollar

IT stocks declined as rupee surged against the dollar. A stronger rupee negatively impacts operating margins of IT firms as the sector earns a lion's share of revenue from exports. India's largest software services exporter TCS lost 3.32%. The company will pursue larger deals and leverage its full service offerings, its newly appointed chief executive and managing director N. Chandrasekaran said early this week. But, India's third largest software services exporter Wipro fell 1.58%

India's second largest software services exporter Infosys Technologies fell 2.36%. Given the improved business conditions and stability in global financial markets, analysts expect Infosys management to revise earnings guidance for the year ending March 2010 (FY 2010) when the company announces Q2 results on Friday, 9 October 2009. At the time of announcing Q1 June 2009 results in July 2009, Infosys projected EPS of between Rs 94.59 to Rs 96 for FY 2010, a decline of between 8.2% to 9.6%.

IT stocks extended losses after IT bellwether Infosys said strengthening rupee was a big concern for its earnings. IT stocks had surged in early trade on good Q2 September 2009 results from IT bellwether Infosys announced before trading hours.