Indian stock markets witnessed sharp gains on Friday led by strength in IT stocks following impressive December quarter results from Tata Consultancy Services (TCS) and Infosys. The BSE Sensex rose 600 points while the Nifty50 climbed above the 21,800 level, driven by rally in tech counters.
TCS and Infosys, two of the largest IT companies in the country, reported better-than-expected earnings for the October-December period earlier this week. TCS delivered strong revenue growth along with margin expansion. Infosys also posted healthy numbers and announced share buyback worth Rs. 9,300 crore.
Following the inline to upbeat results, shares of TCS gained over 4% on Friday. Infosys rallied nearly 7% to emerge as the top gainer on the Sensex. Other IT firms such as Wipro, HCL Technologies and Tech Mahindra also climbed 2-3% each, buoyed by the sectoral sentiments. The Nifty IT index surged 3.75% during the day.
The positive reaction in IT counters overshadowed broader concerns of slowing global economic growth and higher-than-expected US inflation numbers. Foreign institutional investors, which have been selling shares in India over the last few months amid rate hike fears, did not press aggressive selling.
Apart from IT, other key sectoral indices like Nifty Bank, Nifty Media, Nifty Metal and Nifty Realty also opened higher on Friday. Among individual stocks, small infrastructure company HG Infra Engineering gained over 7% after winning a Rs. 716 crore order from Central Railways. However, shares of Nykaa fell 2.5% on reports of a potential block deal by a large investor.
Market experts opined that the upbeat December quarter results and robust deal wins for TCS and Infosys reinforced investors’ faith in large-cap IT stocks. These companies benefit from strong order books and continued demand for digital transformation solutions from global clients.
Overall, firmness in IT counters alongside gains in heavyweights like Reliance Industries helped benchmark indices consolidate at higher levels. Most analysts expect volatility to remain high given risks of slower global growth. But sustained FII buying could help markets extend the ongoing uptrend over the next few weeks.
Going forward, all eyes will be on third quarter results of HDFC Bank due next week for cues on the banking sector. Its performance will provide directional cues for the Nifty Bank index. Investors will also monitor inflation trends from major global economies for further monetary policy outlook from central banks like the US Federal Reserve.
