The NSE Nifty rose 186.20 points, or 0.77%, to close at 24,502.15, having hit a lifetime high of 24,592.20 during the day. The BSE Sensex rose 622 points, or 0.78%, to end at 80,519.34, down from an intraday record of 80,893.51.
“The Nifty was driven to new highs after the Q1 results of TCS, which were above expectations, along with positive commentary of the management,” said Sunny Agrawal, head of fundamental research at SBICAP Securities. “The lower inflation data from the US also added to IT rally, which drove the indices upwards.”
Agrawal said that the street will be keenly watching the July 23 budget. If it exceeds expectations, the Nifty may rise to 24,700-25,000 in the short term, he said.
Tata Consultancy Services (TCS) Thursday reported that its June quarter net profit rose 9% and revenue gained 5% from the year earlier. The Nifty’s IT index gained 4.53% on Friday, with IT large caps such as TCS, Wipro, HCL Technologies, Infosys, Tech Mahindra and LTI Mindtree emerging as top gainers, rising 2.9-6.6%.
US Consumer Price Index inflation slowed to 3% in June, against expectations of 3.1%. This led investors to expect two interest rate cuts from the US Federal Reserve in 2024, said Agrawal.On the technical charts, the Nifty’s key support is at 24,200 levels and the immediate resistance is at 25,000 levels. “Our outlook on the markets continues to remain bullish, and we see no signs of reversal yet,” said Rohit Srivastava, founder of indiacharts.com. “We continue to like IT, banks, pharmaceuticals, autos and realty in the coming days.”On Friday, foreign portfolio investors (FPIs) bought shares worth a net Rs 4,022 crore. Domestic institutions were sellers to the tune of Rs 1,651 crore. Overseas investors have bought stock worth Rs 19,374 crore in July so far, compared with purchases of Rs 26,565 crore in June.
Analysts said certain market segments are excessively valued and investors should avoid them.
“We would suggest investors to partially book profits in stocks in rail, defence and other expensive spaces, and move their money to sectors where we see earnings momentum like IT, pharmaceuticals, banking, auto ancillary, metals and mining stocks,” said Agrawal.