Sensex rises 330 points, Nifty closes above 24,150 as IT rally helps market snap 2-day losing streak. What’s ahead?

The Indian stock market closed in the deep green on Friday as a sharp surge in heavyweight IT stocks helped market record gains after a two-day losing streak.

Sensex gained 331 points to close at 77,264 while Nifty 50 rose around 85 points to end the session at around 24,176 on Friday. The broader markets also closed in the green as India VIX, which measures volatility in the market, dropped more than 4%.

TCS, Infosys, Tech Mahindra and HCL Technologies shares rallied 3-4% to lead gains on Sensex, while Titan, Eternal, HDFC Bank, Axis Bank and Sun Pharma shares jumped more than 1% each. Bucking the trend, ICICI Bank, UltraTech Cement and Asian Paints shares dropped over 1% each.


Among the sectors, Nifty IT sharply outperformed all other indices, rallying over 3.5% on Friday. Nifty Metal meanwhile gained 0.75%. Nifty FMCG and Nifty Consumer Durables however slipped nearly 0.5% each. The overall market breadth turned sharply positive, with NSE seeing 1,918 advances against 1,561 declines, while 124 stocks remained unchanged.

Also read | HCLTech, TCS, Infosys, other IT stocks rally up to 5%. What lies ahead?

What lies ahead for Dalal Street?

Indian equities are expected to trade in a broader range amid a lacklustre environment, mixed global cues and persistent geopolitical tensions, despite Brent crude cooling to $88 per barrel, down around 8% over the past nine days, said Siddhartha Khemka, Head of Research, Wealth Management, Motilal Oswal Financial Services.

“Investors are awaiting further clarity on geopolitical developments, while key global and domestic macro triggers are likely to guide market direction. Domestic equities ended largely flat,” he said, adding that Fed Chair Kevin Warsh's comments on inflation later today at the Jackson Hole Symposium will be keenly watched. His remarks could influence expectations for global interest rates and Indian policy rates, particularly after the hawkish tone of the RBI's August minutes revived expectations of domestic rate hikes, the analyst explained.

Technical view on Nifty

Nifty moved back into the rising channel following a volatile session, however, the trend remains far from bullish, as the index continues to trade below the 50EMA, said Rupak De, Senior Technical Analyst at LKP Securities. Overall, a lack of momentum prevailed, with the index remaining confined within a narrow range, he added.

“On the upside, the 24,200 level may continue to act as an immediate resistance. As long as the index remains below 24,200, the broader sentiment is likely to stay weak, with a possibility of a decline towards 23,900 in the near term. A fall below 23,900 could trigger further correction. On the other hand, a decisive move above 24,200 may lead to an improvement in market sentiment and might strengthen the near-term trend,” according to the analyst.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)