Stock Market: Sidekicks send IT soaring; FIIs rebalance continues
By S Jha
New Delhi, January 24: The foreign institutional investors continue to sell India to buy into China as part of their rebalancing strategy. This shift, which has gained pace since China abandoned ‘Zero Covid Policy’ is making the Indian indices giving sidekicks to investors.
On Tuesday, a day ahead of the weekly and monthly expiry, the Indian indices lost all steam to turn red and close with minor losses. The Tuesday market behaviour again asserted that the Indian indices are in sideways mode, and ‘sell on the rise’ is the approach of the market participants.
The FIIs, who began selling Indian equities strongly in mid-November, have not yet tired, and until they exhaust their rebalancing strategy to buy into cheap Chinese stocks, Nifty and Bank Nifty are being stated by the market participants to remain range-bound. On Tuesday, the FIIs sold a net of Rs 761 crores, while their domestic counterparts chipped in with a net of Rs 1145 crores to stabilize the market and save them from steel fall.
However, the China reopening theme is playing out well with the IT sector. Most of the IT companies have given above expectation third quarterly results, which have been richly rewarded by the investors as well. After the heavyweights, including Infosys, Tech Mahindra and HCL Technology, pleased the investors with their numbers, Persistent Systems delivered one of the best performance, making it one of the most sought after IT stock, as it went soaring.
Similar playoff was seen on Coforge, LT Technology, Mphasis, Happiest Minds, LT Infotech, LT Mindtree and others. Thus, the IT rally is well within the parameters of being called secular, and there could be more legs to it since the developed world is witnessing the inflation peaking, which could further rub well with the IT stocks.
On Tuesday, Maruti came with a blockbuster performance, which sent the scrip soaring in the closing hour of the trading session. The first half was set up well by Tata Motors, which the chartists for a days have been stating to have bounced back from the support of Rs 402 level to go up higher. HDFC twins remained straight for another day, as both HDFC bank and HDFC trended up, only to gain the lose steam in the last hour.
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