Sensex jumps 393 points, Nifty above 15,700 as IT stocks lead rally

Benchmark indices closed in the green on Thursday on the settlement day of June contracts on the NSE, led by a sharp rebound in IT, metals and financials.

The market, which opened on a positive note amid firm global cues, remained firm through the day. Declining Covid-19 cases and the vaccination ramp-up have positively boosted investor sentiments.

However, index heavyweight Reliance Industries and PSU stocks remained under pressure. Reliance witnessed profittaking amid several initiatives announced by the company in its AGM in the later part of the day.

The BSE Sensex closed at 52,699.00, up 392.92 points or 0.75 per cent. It hit an intra-day high of 52,830.68 and a low of 52,385.05. The Nifty 50 closed at 15,790.45, up 103.50 points or 0.66 per cent. It hit an intra-day high of 15,821.40 and a low of 15,702.70.

Breadth turns negative

The market breadth turned in favour of the decliners with 1,746 stocks declining, 1,454 advancing and 150 remaining unchanged on the BSE. As many as 425 securities hit the upper circuit and 282 the lower circuit; 405 hit their 52-week high, while 20 touched a 52-week low.

Binod Modi, Head, Strategy, at Reliance Securities, said, “Benchmark Nifty recovered sharply today led by a sharp rebound in financials and IT. Further, favourable cues from global markets also aided sentiments. The IT index gained over 2.5 per cent ahead of Accenture’s quarterly earnings today.”

“Further, improved prospects of sustained earnings recovery and recent weakness in INR also augur well for IT stocks. Further, the RIL AGM was in focus today in the second half of the session, while investors seemed to be in a profit-booking mode,” added Modi.

Infosys, TCS, JSW Steel, Tech Mahindra and Larsen & Toubro were the top gainers on the Nifty 50, while Reliance, IOC, Coal India, Shree Cements and Bharti Airtel were the top laggards.

RIL down over 2% on profit-booking

RIL ended 2.61 per cent lower at ₹2,147.80 a piece on the NSE amid profit-booking as the company’s 44th annual general meeting gained focus in the second half.

Dr. V.K. Vijayakumar, Chief Investment Strategist at Geojit Financial Services said, "The highlight of the 44th RIL AGM is Chairman Mukesh Ambani's announcement of the launch of a truly transformational clean energy ecosystem, which will "transform India from a major importer of fossil fuels to an exporter of clean energy." The announcement of a ₹75000-cr investment in the next three years in 4 Giga factories will mark a seismic shift in India's clean energy pursuit.”

“The affirmation that RIL will make clean energy a truly global business is good news not only for the planet, but for shareholders too. The announcement of an ultra-affordable smartphone jointly developed by RIL and Google to be launched in September has the potential to accelerate India's digitisation drive. RIL's plan to substantially scale up clean energy and digital technology has the potential to transform RIL into a leading global company in sync with a sustainable planet," added Vijayakumar.

S Ranganathan, Head of Research at LKP Securities said, "With Q1 of the current fiscal drawing to a close next week, technology stocks powered the indices, as the street bets on the IT sector to deliver the first set of earnings. Even as Reliance spelt out its roadmap and strategies at its AGM today, IT stocks quite clearly hogged the limelight today.”

IT stocks shine

On the sectoral front, IT and Metals rebounded sharply from the previous session’s losses. Financials also gained. Meanwhile, PSU Bank, Realty and Pharma remained under pressure through the day.

Nifty IT was up 2.79 per cent at closing, while Nifty Metal was up 0.57 per cent.

Nifty Bank and Nifty Financial Services were up 0.73 per cent and 0.55 per cent, respectively.

Meanwhile, Nifty PSU Bank was down 1.40 per cent. Nifty Realty and Nifty Pharma were down 0.76 per cent and 0.36 per cent, respectively.

Broader indices underperform

Broader indices underperformed on the market as compared to the benchmarks due to profit-booking.

The Nifty Midcap 50 was down 0.43 per cent, while the Nifty Smallcap 50 ended flat.

The S&P BSE Midcap was down 0.51 per cent, while the S&P BSE Smallcap was down 0.22 per cent

The volatility index softened 1.74 per cent to 15.10.

“Notably, barring Pharma, PSU Banks and Realty, most key sectoral indices traded in the green. However, profit-booking remained visible in midcap and smallcap stocks today,” said Modi.

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