Both benchmark indices Nifty and Sensex were trading firmly in the green buoyed by a powerful performance of the IT index on July 1. Four out of 5 gainers on the NSE Nifty were IT stocks with Wipro witnessing the sharpest rise.

Experts suggest that the resumption of foreign inflows and optimism about potential US Fed rate cuts are fuelling the rally. "From a long-term perspective, valuations in IT stocks look very attractive," said Kranthi Bathini, director of equity strategy at WealthMills Securities. Indian IT companies are sensitive to Fed rate cuts because they earn a significant portion of their revenue from U.S. clients.

At about noon, the Sensex was up 0.45 percent at 79,387 while the Nifty was up 107 points at 24,118. About 2,391 shares advanced, 1031 shares declined, and 125 shares unchanged.

India VIX, which measures near-term volatility, meanwhile, inched up by a percent to trade around 14 levels.

Among other sectors, Nifty Metal, FMCG, Auto, and Bank were the other gainers on the bourses with metal being the top performer. Tata Steel, APL Apollo Tubes, and JSW Steel led the rally. Energy and public sector bank stocks slipped the most.

The broader market, which includes midcap and small-cap indices, outperformed the headline indices by a comfortable margin after trading at 0.9 and 1.37 percent higher, respectively. It is worth mentioning that the midcap index touched a new all-time high in the afternoon at 15,824.

Fundamental View

"Despite high valuations, the market is likely to remain resilient. The healthy trend in the recent rally, which has pushed Nifty by 6.5 percent in June, is that it is being led by fundamentally strong large caps, " V K Vijayakumar, chief investment strategist at Geojit Financial Services, said. "The high delivery-based buying among large caps is a strong trend that will impart resilience to the market," he added.

He also added that the global support for the rally continues has been crucial as the S&P 500 has risen 14.4 percent year-to-date compared to 10.4 percent for the Nifty. The US core CPE for May at 2.6 percent is good news for bulls, as it increases the possibility of Fed rate cuts this year.

Technical View

"If the index closes above the 24,200 level, it could potentially rise to 24,400 and 24,500. Conversely, if the index closes below the 23,800 level, it could see a correction down to 23,600 and 23,400, which would act as buy-on-dips levels," Sumeet Bagadia, executive director at Choice Broking said.

Key Nifty gainers

Wipro, Tech Mahindra, LTIMindtree, HUL, and TCS

Key Nifty losers

NTPC, Apollo Hospital, Divis Laboratories, Larsen and Toubro, and Sun Pharma.

Key Sensex gainers

Wipro, Tech Mahindra  TCS, HUL, and Infosys.

Key Sensex losers

NTPC, Larsen and Toubro, Sun Pharma, Power Grid Corp and SBI.

Stock moves

IREDA: Shares surged over 6 percent as the company reported a 382.62 percent year-on-year (YoY) increase in loan sanctions for the June 2024 quarter, totaling Rs 9,136 crore compared to Rs 1,893 crore a year earlier.

Godrej Properties: The counter touched a new 52-week high after the company got leasehold rights for an 11-acre land parcel in Hinjewadi, Pune. The land offers a developable potential of 2.2 million square feet with an estimated revenue potential of Rs 1,800 crore.