Closing Bell: Market Ends At Record High As IT Earnings Start; Sensex & Nifty Rise For The 6th Straight Week

Indian stock market benchmarks-the Sensex and the Nifty 50-closed at record highs on Friday, July 12. This surge was primarily driven by gains in the IT sector, catalyzed by Tata Consultancy Services (TCS) reporting better-than-expected earnings for Q1. Additionally, a slower-than-expected rise in the US Consumer Price Index (CPI) inflation provided further impetus to the rally.

The Sensex soared to an intra-day record high of 80,894 points before closing 622 points higher at 80,519. Similarly, the Nifty 50 hit a new peak of 24,592 points during the day, ending 186 points up at 24,502. This performance marked a nearly 1% increase for both indices, boosted by broad-based gains.

The IT sector emerged as the star of the day, with the Nifty IT index surging over 4%. TCS, which posted stellar Q1 earnings, led the pack, with other major IT firms like Wipro, Infosys, HCL Technologies, Tech Mahindra, and LTIM following suit. These six IT giants were the top gainers on the Nifty 50.

TCS's robust earnings report was a key driver, but the positive sentiment was also supported by expectations of a benign inflationary environment in the US, which could ease the pressure on interest rates globally. This optimistic outlook was reflected in the broad gains across IT stocks, with investors betting on strong future earnings from this sector.

While the IT sector shone, the banking sector had a mixed day. The Nifty Bank index ended slightly in the red, dipping 8 points to 52,279. In contrast, the Midcap Index saw a modest gain of 26 points, closing at 57,174. Maruti Suzuki emerged as the top loser on the Nifty 50, amid market concerns over the Uttar Pradesh government's pending clarification on hybrid vehicle policy.

Reliance Industries, alongside TCS and Infosys, was among the top contributors to Nifty's performance. In contrast, the broader market breadth was somewhat negative, with the NSE advance-decline ratio standing at 1:1, where declines outnumbered advances despite the headline index gains.

Oil India saw a significant rise of up to 17%, driven by Morgan Stanley's revised target price. Zee Entertainment Enterprises gained 6% ahead of its board meeting to consider fund-raising on July 16. Federal Bank hit a 52-week high after UBS upgraded its rating from Neutral to Buy. Conversely, ABB India fell 3% following a downgrade from UBS to Neutral.

LT Foods climbed 3%, buoyed by the company's announcement of revenue expectations of 100 million pounds from its new facility in the UK. Cyient surged 4% on its foray into the semiconductor business, further adding to the day's positive news flow.

The Indian markets have been on a winning streak, with this week marking the sixth consecutive week of gains-the longest streak in 2024. The benchmark indices outperformed the broader markets, thanks to Friday's IT sector rally, which helped the Sensex and Nifty gain 1% each for the week.

However, the Nifty Bank index provided negative returns, falling 0.6% over the week, while the Midcap Index recorded a minor gain of 0.2%. Among the top Nifty gainers for the week were ONGC, ITC, Wipro, HDFC Life, and Britannia, while M&M, Tata Steel, Adani Enterprises, and Shriram Finance were the notable losers.

In the midcap segment, Oil India, REC, Manappuram Finance, and Marico were the top performers. State-run entities like Shipping Corporation of India (SCI), Rail Vikas Nigam Limited (RVNL), Indian Renewable Energy Development Agency (IREDA), Indian Railway Finance Corporation (IRFC), and National Fertilizers Limited (NFL) posted substantial gains, ranging from 13% to 30% over the week.

Friday's market performance reflects the role of the IT sector in driving market sentiment and highlights the market's sensitivity to corporate earnings and macroeconomic indicators. As the Indian stock market continues its upward trajectory, investors will closely watch upcoming corporate earnings and global economic data for further cues.