Strong results from Infosys, Wipro and Mindtree indicate that the market disappointing results from TCS was a one off. Even though high attrition is a challenge for the sector, strong deal wins and robust demand are clear positives, said an analyst.
“Since there are no known triggers for a sharp correction in the short run and the market momentum continues to be strong, exuberant retail investors are likely to drive the market further up even though seasoned investors are worried about excessive valuations,” said VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
How are bluechips doing
After opening in the green, benchmark indices continued to gain momentum. At 9.40 am, BSE flagship Sensex was up 314 points or 0.52 per cent to 61,051. NSE benchmark Nifty advanced 105 points or 0.58 per cent to 18,267.
“On the technical front, benchmark indices had gained for five consecutive sessions and yesterday’s move was a consolidation breakout. We believe markets may continue this bull run till 18,400-18,500. Immediate support and resistance in Nifty50 are at 18,000 and 18,400, respectively,” Mohit Nigam, Head – PMS, Hem Securities, said.
In the 50-share pack Nifty, Wipro was the biggest gainer, up 4.09 per cent. Adani Ports, L&T, Grasim Industries, SBI, Indian Oil, ITC, HDFC Bank, Hindalco and Shree Cement were among other gainers.
HCL Tech was the top loser in the pack, down 1.35 per cent. Tata Motors, TCS, IndusInd Bank, Kotak Mahindra Bank, Bajaj Finance and HDFC Life Insurance were among those that traded in the red.
FACTORS DRIVING MARKETS
Good news
Q2 earnings: After disappointment from TCS, rest of the IT companies positively surprised analysts on Dalal Street, increasing hopes that overall corporate earnings will be better than expected.
Bad news
Tightening begins: After a year-and-a-half of ultra-loose monetary policies from the world’s central banks, concerns about consistently high price rises is forcing officials to tighten their belts. Several have already started — including South Korea and New Zealand, with Singapore joining in on Thursday.
US inflation: A higher-than-expected reading on US consumer inflation pushed the case for a November start to tapering its massive bond-buying programme, but the main question on traders’ lips is now when it will begin to hike interest rates.
Broader markets
Broader market indices were trading higher, outperforming their headline peers in morning trade. Nifty Smallcap was up 0.69 per cent while Nifty Midcap declined 0.92 per cent. Broadest index on NSE, Nifty 500, was up 0.71 per cent.
Trident, Intellect Design, Zensar Tech, IRCTC, Mphasis and Mindtree were gainers from the space while Dr Lal Pathlabs, AB Fashions, Whirlpool, Aegis Chemicals, Radico Khaitan and Rossari Biotech were under selling pressure.
Global markets
Tokyo, Sydney, Seoul, Wellington, Taipei, Manila and Jakarta all rose, while Shanghai flitted between positive and negative territory. Singapore dipped following the surprise policy tightening by the city’s central bank.
