12 Jan , 2024 By : Debdeep Gupta
Information technology stocks, which soared 3-7 percent, were the biggest reason for Nifty's gain of 190 points. The Nifty IT index was the top sectoral gainer as it zoomed 4.75 percent
The benchmark Nifty extended its early gains and scaled a record high of 21837.85 points on January 12, while the Sensex was 160 points shy of its new peak.
The strong run was driven by information technology stocks which soared after two industry majors — Tata Consultancy Services and Infosys — released their December quarter results that rekindled hopes of improved earnings in the coming quarters amid strong new deal wins.
Both companies posted decent numbers in a seasonally weak quarter, however, it was their strong new deals that sparked optimism across the Street of the deal wins turning into revenue in the coming quarters.
Expectations of interest rate cuts also continued to fuel hopes of an easing macro environment for the sector, which is expected to further support its recovery from the earnings downgrade cycle.
Infosys overall Q3 numbers are broadly in line with expectations, TCV wins of $3.2 billion, are a positive surprise, despite the cancellation of one big deal. We view Infosys Q3 earnings as stable in a seasonally weak quarter and shift our focus to earnings improvement in FY25/26, as headwinds bottoming out for the sector, said Sanjeev Hota, head of research at ShareKhan by BNP Paribas.
At 11 am, the Sensex was up 682.92 points, or 0.95 percent, at 72,404.10 and the Nifty was up 189.80 points, or 0.88 percent, at 21,837.00. Market breadth was also in favor of gainers as about 1,921 shares rose, 1,222 fell, and 68 were unchanged.
Information technology stocks contributed nearly 150 points to the Nifty total gains as they soared 3-7 percent. Infosys has the fourth largest weightage in the Nifty 50 at 5.8 percent while TCS is the sixth largest at 4.05 percent. Hence, stellar gains in these two counters alone lifted the Nifty 50 around 0.6 percent.
Likewise, the Nifty IT index also zoomed 4.75 percent to 36,386.00 points. Shares of Infosys, which soared over 7 percent have a weightage of around 27 percent in the Nifty IT index while TCS, which jumped nearly 4 percent takes up 25 percent weightage.
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