TCS Falls 3.9% as Indian IT Stocks Decline After Bank of Japan Rate Hike

Friday, September 18 saw Indian IT stocks come under pressure despite the overall equity markets starting off on a stronger note. TCS was one of the notable losers, along with HCL Tech and Tech Mahindra, which were also trading lower. 

The TCS share price opened at ₹2,177.20 and hit an intra-day low of ₹2,101, ending the day’s trade at ₹2,105, about 3.9% lower. 

Both HCL Tech and Tech Mahindra were lower by 2% during Friday’s session. And, the weakness was evident across the IT sector stocks, with Tata Elxsi down more than 2% and Route Mobile down 2.5%. 

The declines stood out because the broader Indian market was trading in positive territory during the early part of Friday’s session. 

Bank of Japan rate hike in focus 

The pressure on IT shares coincided with the Bank of Japan’s interest-rate hike. 

Mint’s report attributed the sector’s weakness to the rate decision and its potential implications for the US dollar and US Treasury yields, based on the explanation provided by a market expert quoted in the report. 

The report linked the currency movement to the Indian IT industry’s exposure to overseas business. Indian technology companies receive a significant portion of their revenue in US dollars, making movements in the dollar-rupee exchange rate relevant when those earnings are converted into rupees. 

The report, however, did not quantify any financial impact from the Bank of Japan’s decision on TCS, HCL Tech or Tech Mahindra. 

TCS also moves with broader Tata Group weakness 

TCS’s decline also came during a session when several Tata Group stocks were trading lower. Separate market reporting cited in the supplied material placed the IT major’s 3.01% fall alongside weakness in other group companies. 

That development provides a separate market backdrop for TCS on Friday, while the Mint report treated the weakness across the wider IT basket as a sector move associated with the Bank of Japan’s rate decision. 

There was no company-specific financial announcement cited in the supplied material to explain Friday’s decline in TCS, HCL Tech or Tech Mahindra. The available reports also carried no statements from the three companies commenting on their share-price movements or the Bank of Japan’s decision.