Sensex, Nifty hit record highs after strong IT rally

By Koustav DasDomestic stock markets surged to record highs in the final minutes of Friday’s trading session, marking a third consecutive weekly gain. The rise was driven by optimism in the IT sector, fueled by expectations that the US Federal Reserve would pause its rate hiking cycle.

The Nifty index closed 0.78 per cent higher at 19,564.50, while the Sensex rose 0.77 per cent to reach 66,060.90. Both indexes recorded a 1.2 per cent increase for the week.

The recent data indicating a decrease in US inflation further strengthened speculations of a potential pause in rate hikes by the Federal Reserve after July. This resulted in a notable 4.45 per cent surge in IT companies, despite mixed earnings reports from TCS, Wipro, and HCLTech.

The midcap and smallcap segments of the market also witnessed gains, with Nifty midcaps up by 1.15 per cent and smallcaps up by 1.42 per cent. Moreover, the midcaps reached record highs.

Also Read | Sensex, Nifty open higher riding on positive global sentiments

Among the top gainers on the Nifty index were TCS, HCLTech, Tech Mahindra, Infosys, and LTI Mindtree.

“As expected, Indian indices started in the green taking cues from global markets. All sectoral indices were up excluding energy, but the centre of attraction was Nifty IT which surged around 4.5 per cent on account of the encouraging outlook from major IT companies, which declared results so far,” said Riches Vanara, Technical And Derivatives Analyst, Stoxbox.

“From the start of the first quarter earnings season, we were of the view that no major negative surprises to neutral numbers/commentaries would lead to some buying in IT counters. The WPI data released today also supported gains, which fell 4.12 per cent in June, the third consecutive month of contraction and the lowest since October 2015,’ Vanara added.

On the technical front, Vanara said, “Nifty opened on a tepid note and remained mildly volatile in the opening hour. The index then edged higher and staged a bullish breakout from the former 220 points consolidation range. The index marked a new life high of 19,595 as the move was bolstered by short covering in the IT sector.”

V.L.A. Ambala (SEBI Registered Research Analyst), Stock Market Today (SMT), said, “Nifty & Sensex hit new all-time highs and closed at 19,564 and 66,060 respectively. The market is getting ready for a new impulsive movement in this uptrend.”