Nifty IT index soars nearly 3%; HCL, TCS touch new all-time highs – here’s why
The U.S. services sector growth picked up in January as new orders increased and employment rebounded. The Institute for Supply Management (ISM) said on Monday that its non-manufacturing PMI increased to 53.4 last month from 50.5 in December, as per recent media reports.
A reading above 50 indicates growth in the services industry, which accounts for more than two-thirds of the economy. Economists polled by Reuters had forecast the index rising to 52.0.
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Amid this positive development, the Nifty IT index commenced today’s trade at 37,267 points, a gap-up from the previous close of 37,162, and continued to strengthen throughout the day, reaching an intraday high of 38,286 points. Finally, the index concluded the session at 38,246, representing a 1084 point increase or 2.92% gain.
HCL Tech emerged as the top gainer, with a 4.40% jump, reaching a new record high of ₹1,627 per share. TCS followed as the second-top gainer in the Nifty IT index, achieving a new record high of ₹4,149 per share, surpassing the previous best of ₹4,043. Notably, the stock crossed the ₹4,000 mark after 12 months.
From the October low of ₹2,926, the stock has seen a sharp recovery, and it is up by nearly 40% to date.
As the stock hit a new all-time high, the company’s market capitalisation crossed the ₹15 lakh crore mark . Taking the stock’s all-time high price into account, the company’s m-cap in today’s intraday trade touched ₹15.13 lakh crore.
Other IT stocks, including Wipro, Mphasis, Coforge, Infosys, L&T Technology Services, Tech Mahindra, Persistent Systems, and LTIMindtree, all closed today’s session with gains ranging from 0.6% to 3.6%.
The robust performance of the IT sector also contributed to the Nifty 50, which concluded today’s session with a gain of 0.72%, settling at 21,929 points.
Commenting on today’s market performance, Vinod Nair, Head of Research at Geojit Financial Services, said, “The market exhibited a positive breadth, registering moderate gains, with investors showing reluctance to significantly trim their positions ahead of the RBI MPC meeting.”
“Expectations for a dovish monetary policy buoyed sentiment in the bond market. Meanwhile, oil and gas stocks held a modest advance as the market weighed down geopolitical risks in the Middle East and awaited improvements in the weekly US crude inventory today,” he added.
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On the Nifty 50 technical front, Rupak De, Senior Technical Analyst at LKP Securities, said, “The Nifty 50 exhibited a predominantly sideways trend throughout the day, with traders expressing uncertainty regarding the market’s direction. A range-bound movement is expected to persist until a breakout occurs on either side. A decisive upward move beyond 21,950 has the potential to propel the Nifty towards 22,200. Conversely, a decline below 21,850 could instigate a correction towards the 21,700 level.”
Meanwhile, the RBI governor-headed Monetary Policy Committee will start its three-day deliberations on February 6. Governor Shaktikanta Das will announce the decision of the six-member panel on February 8.
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 making any investment decisions.
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Published: 06 Feb 2024, 05:43 PM IST
