Indian benchmark equity indices rallied around 1 per cent in intra-day trades on Friday, with NSE benchmark, the Nifty 50, hitting a fresh all-time high at 21,848. The Nifty was quoting around 21,835 – up 189 points as of 11:45 AM.
The S&P BSE Sensex so far in the day has touched a high of 72,464, and was holding a gain of almost 700 points at 72,400 levels. The Sensex had registered a fresh peak at 72,562 last week.
Since the start of the calendar year, the markets have been trading a volatile note, with certain sector of market participants turn skeptic on valuation concerns given the sharp rally from the October lows. Also, rising geopolitical concerns and upcoming general elections in India have kept investors sentiment in check.
However, here’s what driving Fridays’ rally:
IT stocks: Markets broadly believed that IT sector would report subdued earnings for the December quarter. While, Infosys and TCS did report subdued numbers, with the former even lowering its growth guidance for the third straight quarter. The silver lining was the total contract value (TCV) signed, which continued to show a healthy momentum.
This has prompted brokerages to remain optimistic on the future growth prospects. That apart, the Infy ADR on the NYSE had rallied 5 per cent post results, which were announced after market hours on Thursday in India.
As a result this morning, Infosys opened with a gap of 4 per cent at Rs 1,556, and went on build gains as the day progressed. The stock so far has touched a high of Rs 1,613 (up 8 per cent) and is within striking distance of its 52-week high at Rs 1,620.
TCS too started trade gap-up at Rs 3,844, and has touched a high of Rs 3,894 so far in the day. The stock quotes 4 per cent higher at Rs 3,883.
The buying soon spread across the IT sector, with the likes of Wipro and HCL Technologies also up 4 per cent and 3 per cent, respectively, ahead of Q3 results today. The BSE IT index was up almost 5 per cent at 37,063.
DIIs lend support: After selling shares worth Rs 7,300 crore in the first week of the New Year, the Domestic Institutional Investors turned net buyers this week, and have net purchased stocks to the tune of Rs 3,950 crore so far in the four trading sessions this week.
Technical: Amid the current volatile phase, the Nifty 50 repeatedly tested support around its 20-DMA (Daily Moving Average), which now stands at 21,550 levels. The NSE benchmark is now seen climbing towards the higher-end of the Bollinger Bands on the daily chart at 21,900 levels.
Indian Rupee: The Rupee has been steady around the 83-mark in recent trading sessions. The resilience shown of the Indian Rupee against the US dollar will help attract FII flows to India.
First Published: Jan 12 2024 | 12:35 PM IST
