NEW DELHI: Domestic equity market’s 9-consecutive days winning run is the longest since October 2020 but a poor earning show by IT majors may soon break the rally. Add to it, global markets may see increased volatility after the FOMC minutes hinted at a possible “mild recession”.
The BSE Sensex on Thursday ended at 60,431, up by 38.23 points while Nifty50 closed at 17,828, up by 15.60 points. In the past nine sessions, Sensex has gained about 2,800 points while the Nifty50 has surged about 870 points.
Vinod Nair, head of Research at Geojit Financial Services, said shares experienced a downturn on Thursday, weighed down by IT stocks following weak quarterly earnings and a cautious outlook from the top IT firm, which flagged apprehensions over deferred spending and uncertainty in its BFSI segment.
Shares of TCS fell 1.60% on Thursday while Infosys plummeted nearly 3%. HCL and Tech Mahindra plunged by 2% while Wipro dipped by over 1%. It was due to buying in select heavyweights, especially from the banking pack trimmed the initial losses and helped Sensex and Nifty- to close with minor gains.
Many experts were expecting the local market to advance sharply after India and the US reported a sharp dip in consumer inflation for March. However, this did not happen.
“The decrease in CPI inflation to 5.66% in India, coupled with the moderation of core inflation, supports the decision of the MPC to keep policy rates on hold. While US inflation cooled to 5.0%, anxieties grew globally after the FOMC minutes hinted at a possible “mild recession” due to the impact of banking turmoil,” added Nair.
Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities, said that the sharp intra-day gyration of Thursday shows that the rally could be losing steam given the continuous upward movement over the past week or so.