Sensex jumps 373 points, Nifty rises 0.19 pc at open as IT stocks rally despite global tech sell-off
Indian markets start strong with Sensex jumping 373 points and Nifty rising, led by IT giants despite a global tech sell-off.
Indian equity benchmarks started the trading session on a positive note this Friday, defying a global trend of technology stock declines. The Indian equity benchmarks open higher, with the BSE Sensex climbing 372.76 points, or 0.51 per cent, to reach 73,622.15. Similarly, the NSE Nifty 50 gained 43.75 points, or 0.19 per cent, settling at 22,731.40 at the time of reporting.
IT Giants Lead the Charge
In a surprising turn of events, the domestic IT sector spearheaded the early gains despite a sharp overnight crash in US tech stocks, where the Nasdaq plunged 2.6 per cent and the S&P 500 dropped 1.2 per cent. This resilience was also mirrored against Asian markets, as South Korea's KOSPI and Japan's Nikkei 225 both saw significant declines.
Among the Nifty 50 companies, the technology sector saw the most aggressive buying:
- Tata Consultancy Services (TCS): Rose by 3.73 per cent.
- Infosys: Gained 3.10 per cent.
- HCL Technologies: Increased by 2.44 per cent.
- Tech Mahindra: Advanced by 1.20 per cent.
Other notable gainers included Bharti Airtel, which rose 0.83 per cent, and Reliance Industries, which edged up 0.48 per cent. Sectorally, the Nifty IT index surged by 2.72 per cent.
Market Drags and Sectoral Slumps
While IT soared, other sectors faced headwinds. The Nifty Metal index declined by 1.24 per cent, with Hindalco Industries falling 1.47 per cent and Tata Steel losing 0.74 per cent. Adani Enterprises and Adani Ports also traded lower, dropping 1.35 per cent and 0.80 per cent respectively.
Further declines were seen in the Realty sector (down 0.91 per cent), Media (down 0.67 per cent), as well as in auto and PSU bank stocks. Additionally, shares of Trent and Titan were trading in the red.
The Jio IPO Factor and Macroeconomic Pressures
Market analysts point to a mix of conflicting signals currently influencing the domestic market. Dr V K Vijayakumar, Chief Investment Strategist at Geojit Investments Limited, highlighted that the surge in Brent crude prices—trading around USD 113.70 to USD 114 per barrel—remains a significant negative for the economy.
However, several positive catalysts are providing a cushion:
- Bond Yields and Currency: A decline in the US 10-year yield to 4.96 per cent and the rupee's appreciation to 94.70 against the dollar are expected to curb selling by Foreign Institutional Investors (FIIs).
- Liquidity Boost: The completion of the Jio Platforms IPO allotment is expected to inject massive liquidity back into the system. Out of the Rs 3.73 lakh crore invested, over Rs 3 lakh crore is anticipated to return to the market by next Monday.
Expert Outlook: Large-Caps vs. Small-Caps
While the liquidity inflow is expected to lift overall sentiment, experts warn that the recovery may be uneven. Dr Vijayakumar suggested that fairly-valued large-cap stocks offer the best opportunities for patient investors due to their resilience. In contrast, small-cap stocks may continue to face pressure as their valuations, often driven by liquidity rather than fundamentals, come under scrutiny.
Security Scare Hits eMudhra
In a sharp contrast to the broader market gains, eMudhra Ltd saw its shares crash by approximately 36.5 per cent, falling to Rs 343.05 from its previous close of Rs 540.15. This drastic drop follows reports of a security incident involving eight intermediate certificate authority keys in its global digital certificate business, sparking fears of fraudulent certificate issuance.
Technical Levels to Watch
From a technical perspective, analysts are keeping a close eye on key resistance and support levels. Hemang Gor of Axis Direct noted that if the Nifty sustains a move above the 22,800 resistance level, it could trigger a short-covering rally toward 23,000. On the downside, 22,500 remains a critical support level for the index.