On Thursday, the benchmark stock market indices in India achieved record closing highs, propelled by strong gains in IT stocks following positive Q1 results for FY25. The S&P BSE Sensex surged by 626.91 points to close at 81,343.46, while the NSE Nifty50 climbed 187.85 points to finish at 24,800.85.
Vinod Nair, Head of Research at Geojit Financial Services, noted that the indices strengthened notably in the second half of the trading session, reaching new peaks driven by renewed investor interest in IT stocks. This optimism was fueled by robust earnings reports from leading IT firms for the June quarter and the depreciation of the Indian rupee, which typically benefits IT exporters.
Infosys, a key player in the IT sector, saw its shares rise by 2.20% to Rs 1,764.05 after reporting a net profit of Rs 6,374 crore for Q1 FY25, surpassing market expectations. The company also recorded a solid revenue growth of 3.6% to Rs 39,315 crore, reinforcing positive sentiment across the sector.
Among other top gainers on the Nifty50 were LTI Mindtree, which surged by 3.48%, followed by ONGC (2.99%), TCS (2.84%), Wipro (2.41%), and Bajaj Finserv (2.39%). On the downside, Hero MotoCorp led the losses with a decline of 1.49%, followed by Coal India (-1.48%), Asian Paints (-1.40%), Grasim (-1.25%), and Bajaj Auto (-0.86%).
The Nifty Midcap 100 index and the Nifty Smallcap 100 index dipped by 0.96% and 1.22% respectively, indicating broader market underperformance due to high valuations and sectoral rotation concerns. The India VIX, which measures market volatility, rose by 2.02% during the session.
Sectorally, IT and FMCG indices posted significant gains, with Nifty IT surging by 2.22% and Nifty FMCG rising by 0.96%. Conversely, Nifty Media witnessed a substantial decline of 3.57%, while Nifty Metal fell by 0.87%. Nifty Pharma edged up marginally by 0.01%, and Nifty PSU Bank and Nifty Realty saw modest movements.
Ajit Mishra, SVP of Research at Religare Broking Ltd., highlighted that the market's upward trajectory was driven by rotational buying in heavyweight stocks, aiming for the new milestone of 25,000 in the Nifty. He cautioned, however, that the broader indices' recent underperformance and rising volatility expectations due to the upcoming Union Budget and ongoing earnings season warrant cautious stock selection and hedged positions.
Overall, the record-setting performance of the benchmark indices, buoyed by strong IT sector results and sector-specific movements, reflects a cautiously optimistic market sentiment amidst evolving economic conditions and upcoming financial developments.
