NEW DELHI: Domestic equity market scaled to all-time fresh highs on Friday, thanks to a blazing rally in the information technology (IT) stocks. Select PSU banking, realty and consumption stocks also supported the strong run and eliminated concerns rising from higher-than-expected December inflation data in the US that might lower the chances of an early interest rate cut.
The BSE Sensex hit a new lifetime high of 72,721 before closing the day at 72,568, up 847 points or 1.18%. The NSE Nifty50 also hit a fresh high of 21,928 on Friday before ending the day at 21,895, up 247 points or 1.14%.
The market capitalisation of all stocks listed on Bombay Stock Exchange increased by about Rs 3 lakh crore to Rs 373.4 lakh crore. Shares of IT heavyweights Infosys and Tata Consultancy Services (TCS)- jumped 8% and 4% respectively on Friday after the two firms reported their third quarter (Q3FY24) numbers on Thursday. Sectorally, the Nifty IT index surged 5.27% on Friday.
While TCS reported a 2% year-on-year (YoY) growth in consolidated net profit to 11,058 crore and a 4% increase in revenue to 60,583 crore, Infosys PAT fell 7% YoY to Rs 6,106 crore and its revenue from operations rose by 1% to Rs 38,821. Most analysts believe that the worst for IT companies is now behind and a strong order pipeline is a big positive. Following the result, ICICI Securities revised its target price for TCS to Rs 3,872. For Infosys, Emkay Global kept its target unchanged at Rs 1,850.
“Contrary to expectations of weak third-quarter results from the IT sector, better-than-expected results along with green shoots of recovery in the IT sector on the back of an improved outlook for BFSI in FY25 positively influenced domestic market sentiments,” said Vinod Nair, Head of Research, Geojit Financial Services.
According to market experts, the December quarter earnings season will be the biggest force to dictate market return in the near future. The market will also react to India’s inflation data that came out on Friday. “Domestic inflation data for December was marginally lower than anticipated, while industrial production (IIP) witnessed a deceleration more than expected. In the near term, investors’ trade positions
will be more inclined towards the upcoming result season; the overall forecast for earnings growth remains optimistic, projecting double-digit figures,” said Nair.