Market Wrap: Sensex, Nifty end at record closing highs on IT stocks boost; investors earn nearly ₹3 lakh crore in a day

Frontline indices the Sensex and the Nifty settled at their fresh record closing highs on Friday (July 14) on gains led by shares of IT majors, such as Infosys and TCS. Positive global cues, amid expectations that the US Federal Reserve may pause rate hikes after July, also gave a fillip to domestic market sentiment.

The market is teeming with positivity as expectations have grown stronger that the Fed will take a pause on rate hikes after lifting rates by 25 bps on July 26 as US inflation eased more than expected last month.

Sustained foreign capital inflow and the weakness of the US dollar are also keeping the market high. As per a Reuters report, the dollar fell to a fresh 15-month low against major peers on Friday and US Treasury yields traded near multi-week lows following the sharpest weekly drop in four months.

Today's gains were led by IT majors. IT stocks, including TCS, HCL Tech and Wipro, ended with strong gains despite their subdued Q1FY24 results and cautious guidance for the short term. Other major IT stocks such as Tech Mahindra and Infosys jumped over 4 per cent each. 

Experts pointed out that investors are taking contra bet on IT stocks as they found IT players' margins are stable while they are also focussing on new generation business opportunities. An increase in pricing power due to moderation in the US dollar as the rate hike cycle is approaching its end is also a positive factor for IT stocks.

Read more: Sensex, Nifty at record high levels: Five reasons why the market is rallying

Stock Market Today

Sensex opened 217 points higher at 65,775.49 against the previous close of 65,558.89 and rose 601 points in intraday trade to hit its fresh record high of 66,159.79. The index finally closed at 66,060.90, up 502 points, or 0.77 per cent. This was the fresh record closing high of the Sensex.

Shares of Infosys, TCS and HCL Tech ended as the top contributors to the gains in the Sensex index.

The Nifty50 also hit its fresh all-time high of 19,595.35 in intraday trade and settled at its fresh record closing high of 19,564.50, up 151 points, or 0.78 per cent. 

BSE Midcap index closed one per cent higher at 29,393 while the Smallcap index closed with a gain of 1.14 per cent at 33,701.90.

The overall market capitalisation of the firms listed on the BSE rose to ₹298.5 lakh crore from ₹295.8 lakh crore in the previous session, making investors richer by ₹2.7 lakh crore in a single session.

As many as 189 stocks, including ICICI Bank, ONGC, Tech Mahindra, Zomato, Bajaj Holdings and Investment, Colgate Palmolive India and Info Edge (India), hit their fresh 52-week highs in intraday trade on BSE.

Top Nifty Gainers and Losers

As many as 34 stocks ended higher in the Nifty50 index while 16 ended with losses.

Shares of TCS (up 5.04 per cent), Infosys (up 4.46 per cent), Tech Mahindra (up 4.32 per cent), LTIMindtree (up 4.20 per cent) and HCL Tech (up 3.72 per cent) ended as the top gainers in the Nifty index.

On the flips side, shares of HDFC Life Insurance Company (down 1.56 per cent), Power Grid (down 1.03 per cent), Dr Reddy's Labs (down 0.81 per cent), UltraTech Cement (down 0.66 per cent) and Titan (down 0.48 per cent) ended as the top losers in the Nifty pack.

Top gainers, losers today: TCS, Infosys, Tech Mahindra, Subex, M&M; check full list here

Sectoral Indices Today

Nifty IT, with a strong gain of 4.45 per cent, emerged as the top gainer among the sectoral indices, followed by Nifty Media which rose 3.94 per cent. Nifty Metal (up 1.41 per cent) and Realty (up 1.16 per cent) also ended significantly higher.

Nifty Bank closed with a gain of 0.35 per cent at 44,819.30.

Expert's Views on Markets

"The controlled inflation in the US has instilled optimism among investors that a 25-bps rate hike would be adequate to stabilise the US economy. This improved prospect has contributed to the strong buying of Indian IT stocks despite muted Q1 earnings. Furthermore, the broad-based rally in the domestic market was supported by India's consecutive third-month decrease in wholesale prices, along with the positive involvement of FIIs," reported Vinod Nair, Head of Research at Geojit Financial Services.

Technical Views on Markets

Amol Athawale, Vice President of Technical Research at Kotak Securities pointed out that a spectacular rally in IT stocks following better-than-expected earnings from select frontline technology companies triggered a late upsurge, which propelled Sensex to close above the 66,000 mark.

"The market seems to be flooded with strong FII inflows, and with US inflation moderating investors are hoping for a rate hike pause by the Federal Reserve later this month. On daily and weekly charts, the Nifty has formed a bullish candle along with a breakout formation on intraday charts, which supports a further uptrend from the current levels," said Athawale.

"For the trend-following traders now, 19,450 would be the trend decider level and could move up to 19,800. Below 19,450, we could expect one quick correction till 19,400-19,300. For Bank Nifty, the 20-day SMA (simple moving average) or 44,500 would be the trend decider level. Above the same, the index could retest the level of 45,250-45,600. On the other side, below 44,500 the Bank Nifty could slip to the 50-day SMA or 44,000," Athawale said.

Rahul K Ghose, Founder & CEO of Hedged, an algorithm-powered advisory platform said the Nifty today saw short covering in the 19,500 calls propelling the markets up in the last hour.

"The base of the index has now shifted to 19,200 from the older 19,000 level. Bank Nifty is the index to watch out for in the coming week, Bank Nifty today has closed with a bullish hammer candle right on its 20-day exponential moving average. It has taken support at this average. Today's move we feel will be the start of Bank Nifty's momentum making it cross its near-term hurdle of 45,200 in the coming week,” said Ghose.

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Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before taking any investment decisions.