IT stocks add to upward momentum as Sensex surges past 73,000, Nifty scales 22,000-mark

Domestic equity markets continue their upward movement on Monday, with the Sensex crossing the 73,000 mark and the Nifty scaling the key milestone of 22,000 for the first time.

The 30-share BSE Sensex jumped 481 points, or 0.7 per cent to open at a fresh record of 73,049.87 on Monday. It was trading at 73,108.31, up 539.86 in the early morning trade. The Nifty 50 was trading at 22,023.85, up 128 points, or 0.6 per cent. It opened at 22,053.15, an all-time high, compared to the previous close of 21,894.55.

“The rally in the market, primarily driven by momentum, is now getting support from fundamentals. The sharp bounce in large-cap IT stocks on the back of slightly positive management commentary indicates that an underperforming segment can surprise on the upside on news of a turnaround in the sector,” said V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services.

The IT index which shot up by 5 per cent on January 12, will remain firm since HCL Tech and Wipro have more room on the upside. The buying in IT stocks last week was driven by decent results posted by TCS and Infosys for the quarter ended December 2023. Analysts expect the third quarter of the current fiscal to be the bottom of the earnings downgrade cycle for the IT sector.

Analysts said the surge in domestic indices was reflecting the positive trend in the global markets which have gained on expectation that the US Federal Reserve will implement its first rate cut in March.

Shares in Asia were higher after China’s central bank unexpectedly kept a key interest rate unchanged and in the wake of the Taiwan election on the weekend. China’s central bank left the medium-term policy rate unchanged (2.50 per cent) on Monday, defying market expectations as signs of a weaker currency continued to limit the scope of monetary easing, said Deepak Jasani, Head of Retail Research of HDFC Securities.

“Nifty has broken out on the upside from the consolidation range and shows signs of further up move. An important driver of the rally is RIL (Reliance Industries Ltd) which is moving up on large delivery-based buying on news of the commissioning of the Dhirubhai Ambani Green Energy project in H2 of 2024. RIL, large-cap IT and banking majors can provide fodder for the bulls in the near term,” Vijayakumar said.

Among NSE firms, the stocks that gained include Wipro Ltd, Tech Mahindra Ltd, HCL Technologies, Infosys and LTI Mindtree Ltd.

The US market will be closed on Monday in honour of the late civil-rights leader Martin Luther King Jr. This is likely to result in decreased trading activity, potentially dampening market volatility, market experts said.