Stock Market: IT pack rides bulls; expiry pulls down indices from high
Photo Credit Twitter TCS
By S Jha
New Delhi, December 1: The US third quarter GDP number cheered the IT scrips on the bourses, as a broad-based rally came to almost all the counters on Thursday. The indices after reaching record highs gave up most of the gains on account of the weekly expiry, with Bank Nifty rise checked by the option sellers as ICICI Bank, and index heavyweight, turned negative.
IT scrips had been underperforming the broader market for months on account of the fear that the US would enter recession early next year. The fear of the recession is on account of the rising interest rates. But strong voices are emerging to demand from the US Fed to hold back any more hikes in the backdrop of the moderation in inflation. But the third quarter of the US GDP recorded a growth of 2.9 per cent, while the street had been anticipating number lower.
If the US survives the recession scare and the economy comes over three per cent, the IT companies in India would begin expanding their operations and headcount expansions, which had seen squeeze in the recent months. There are reports that the IT majors in India have not been hiring enough talents being wary of the US economic outlook.
On Thursday, LT Technology Services rose by nine per cent, while Persistent Systems rose by about four per cent. Other IT midcap and smallcap such as Mphasis, Mind Tree, Info Edge and Happiest Minds also joined the rally. The large cap IT majors such as TCS, Infosys, HCL technology and tech Mahindra led the IT rally from the front, rising sharply and they defied the post-noon cooling on the indices on account of the expiry.
Tata Steel has been trading in a tight range for several months. The scrip sharply gained in the later afternoon to touch the 111 level, while the chartists claim that if Tata Steel could break out of the 114 level it may launch itself into a rally on the lines of Hindalco, which has sharply risen from the level of 425 to 465 within a few days.
Hero Moto Corp and Reliance Industries maintained their strength on Thursday. The auto numbers which came in the off-market hours were in line with the street expectations. The foreign institutional investors (FIIs) who had pumped in over Rs 22,000 crore in the equity market in November began December on a selling note, as they had a net sale of Rs 1566 crores. However, their domestic counterpart covered up for them by recording a net buy of Rs 2645 crores.
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