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IT Stocks Surge As Rupee Hits One-Month Low On High Crude Prices

Olga Robert

A surge in crude oil prices following US airstrike in the Middle East weakened the Indian rupee on Friday to open at a near one-month low of 71.61 against the American dollar.

It further weakened to a low of 71.93/dollar, higher than the level of 71.74 seen on 4 December.

On Thursday, the rupee closed at 71.37 a dollar.

Oil prices in the global markets jumped 4 percent to hit 3-month high $69.19 a barrel after a US strike killed key Iranian and Iraqi military personnel. Iranian Major-General Qassem Soleimani, head of the elite Quds Force, and Iraqi militia commander Abu Mahdi al-Muhandis were killed in an early morning strike on Friday on their convoy at Baghdad airport.

The US Pentagon confirmed the deaths and said that the attack was conducted at the orders of the American President Donald Trump.

High crude oil prices put pressure on India's current account deficit as the country is highly dependent on imports to meet its fuel demand. Higher import bill and CAD puts pressure on the rupee.

However, a weaker rupee is beneficial to Indian IT companies who make most of their revenue in dollars from software exports and servicing clients in the US.

Shares of NIIT Tech and Tata Consultancy Services (TCS) gained over 3 percent each while HCL Technologies and Hexaware Technologies rose over 2 percent. Shares of Infosys, Tech Mahindra, Wipro, Tata Elxsi, and Mindtree also gained in the range of 1 to 2 percent in trade on Friday.

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