IT stocks push Sensex over 100 points higher; Nifty tests 15,200 mark

IT stocks push Sensex over 100 points higher; Nifty tests 15,200 mark

NEW DELHI: Domestic benchmark indices traded in the green on Friday thanks to buying in IT stocks but gains were limited as high valuation and weak global cues weighed on the market.

The market has entered a consolidation phase but still, all dips are being bought. FIIs continue to be bullish keeping indices at record high levels.

“The impressive Q3 results have been supporting the markets in February. A distinct pattern has been the stocks of companies that declared good results selling off after the news. This can be because of bull unloading after the news. Retail investors have an inclination to buy stocks looking at the results. Normally this does not prove successful,” said VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services.

“More often than not good news is likely to be in the price. The reverse also is true. Stocks bounce back after bad results. So investors have to be careful reacting to results. Since valuations have run up quite a bit, activity is likely to shift to mid-small-caps where there are still opportunities left.”

Factors driving markets

  • Q3 earnings: India Inc. continues to deliver better than expected top and bottom line on improved demand. This has resulted in earnings and ratings upgrades.
  • More spending: US President Joe Biden plans to ask Congress this month to invest heavily in infrastructure after his $1.9 trillion COVID-19 aid package makes its way through.
  • Dollar set to slide this week: The dollar headed for its first losing week in three as new signs of weakness in the US jobs market dented investor expectations about the pace of a pandemic recovery.
  • US-China relationship: Biden and his Chinese counterpart Xi Jinping held their first phone call on Thursday as leaders and appeared at odds on most issues, even as Xi warned confrontation would be a “disaster” for both nations.

How bluechips are doing

After opening in the green, benchmark indices maintained their lead. At 9:48 am, BSE flagship Sensex was up 116 points or 0.22 per cent to 51,647. NSE benchmark Nifty followed, and added 24 points or 0.16 per cent to 15,197.

“The markets have opened on a tepid note this morning, unclear in its direction for the day. Sometimes traders do not wish to carry a lot of open positions over the weekend. However the trend of the Nifty is positive and all dips can continue to be utilised as buying opportunities. The index still has steam to conquer levels closer to 15,500. 14,500-14,600 is a good support band for the Nifty and as long as that holds, we are in comfortable territory,” said Manish Hathiramani, proprietary index trader and technical analyst, Deen Dayal Investments.

In the 50-share pack Nifty, Wipro was the biggest gainer, up 2.59 per cent. Tech Mahindra, Infosys, HCL Tech, TCS, Grasim Industries, Hero Moto and ICICI Bank were among other gainers.

ITC was the top loser in the pack, down 3.29 per cent. Coal India, ONGC, GAIL, Bharti Airtel, Sun Pharma, Tata Steel, Divi’s Laboratories and SBI were other losers in the pack.

Broader markets

Broader market indices traded with gains outperforming their headline peers in morning trade. Nifty Smallcap was up 0.35 per cent while Nifty Midcap added 0.01 per cent. Broadest index on NSE, Nifty 500 was up 0.07 per cent.

Dalmia Bharat, Jubilant Foodworks, Dhani Services, Affle India, SpiceJet and Vakrangee were among major gainers from the space while Karur Vysya Bank, Ircon International, Dixon Tech, Ashok Leyland, AU SFB and Hudco were under selling pressure.

Global markets

MSCI’s broadest index of Asia-Pacific shares outside Japan fell 0.03 per cent, trading just shy of an all-time high reached in the previous session. Australian stocks lost 0.31 per cent. Shares in Tokyo fell 0.32 per cent, pulling back from 30-year highs.

Futures for the S&P 500 were off 0.12 per cent.

The markets in Greater China and most of Southeast Asia are closed on Friday for the Lunar New Year holiday.

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