The Indian rupee. Photo: AFP
The Comptroller General of Accounts' data for April 2020 show that the federal government's share of tax collection during April was 167 billion rupees (US$2.21 billion) compared with 553 billion rupees in the previous year. Photo: AFP

While the Indian rupee has been in free-fall mode with no signs of any pause or rebound, technology stocks have been on the upswing on the back of cheaper exports.

The Nifty IT index has gained 35% this year on top of a 12% upside in the previous year and has outperformed all other sectoral indices, Moneycontrol reports.

On a year-to-date basis, companies such as HCL Technologies, Infosys, KPIT Technologies, Mindtree, TCS and Tech Mahindra gained 18-80%.

The other drivers of the rally in technology stocks include growth in US markets, especially in banking, financials and the services segment, and recent share buybacks by information technology majors.

Market leader Tata Consultancy Services will begin a share buyback worth 160 billion rupees on Sept. 6, while HCL Technologies’ 40-billion rupee share buyback recently had shareholder approval.

The rupee has become Asia’s worst-performing currency this year and in August it suffered the biggest monthly drop in three years.

This, coupled with hardening crude oil prices, is pushing up India’s unwieldy oil import bill, raising inflation fears. Global funds have pulled US$6.3 billion from local bonds so far this year.