Frontline Indian outsourcers get a major portion of the revenues from the US. So a weakening of the rupee boosts their rupee profits.
The rupee fell to 64.20 per dollar today - its lowest level in 2 weeks - tracking a stronger greenback after China devalued the yuan by nearly 2 per cent. The rupee had closed at Rs 63.75 on Monday.
SV Prasad, chairman of Chime Consulting, said that with yuan's devaluation there may be pressure on the Reserve Bank of India to go for an interest rate cut, which could lower fund inflows into Indian debt markets and in turn weaken the rupee.
The rupee has been one of the strongest emerging market currencies.
At 10:02 a.m., the BSE IT index was up 1 per cent to as compared to a flat Nifty. Among the IT stocks, Infosys was up 1.5 per cent, Tech Mahindra 1 per cent and TCS 0.90 per cent.
