IT Stocks Drag Indian Market Ahead Of CPI Data
After opening in the green, Indian equity indices closed marginally lower on Thursday ahead of the US consumer inflation report later in the day. A slide in IT stocks on weak earnings by Tata Consultancy Services weighed on the sentiments even as investors awaited the results of peers Infosys and HCLTech, as well as key inflation data.
The 30-share BSE benchmark Sensex declined 65 points or 0.1 per cent to settle at 66,408. The broader NSE Nifty dropped 08 points or 0.04 per cent to end at 19,842.
From the Sensex pack, Infosys, Tech Mahindra, TCS, and HCL Tech were the top laggards, falling 1.9-2.8 per cent. Bajaj Finance, Wipro, Nestle, Kotal Bank, and SBI also closed lower. On the flip side, Maruti, Power Grid, NTPC, and M&M closed with gains.
Sector-wise, Nifty IT declined 1.67 per cent, led by Infosys, TCS, HCL Tech and Wipro. Whereas Nifty Auto surged 0.78, led by Bosch, TVS Motor, Maruti and Bajaj Auto.
In the broader market, Nifty Midcap100 gained 0.17 per cent and Smallcap100 advanced 0.65 per cent.
FII and FPIs, on Thursday, saw a net sales of Rs 1,862.57 crore in the cash segment. A total of Rs 10,463.97 crore was sold against a total purchase of Rs 8,601.40 crore. Domestic institutional investors saw a net purchase of Rs 1,532.08 crore in the cash segment. A total of Rs 7,174.31 crore was sold against a total purchase of Rs 8,706.39 crore.
Meanwhile, The underwhelming result of the IT major and its lacklustre near-term prospects exerted downward pressure on the IT sector. Nevertheless,
the broad market exhibited strength, primarily in anticipation of healthy overall Q2 results led by expansion in India’s operating profit as volume demand is sustained despite the global slowdown.
The global trend was positively attributable to the favourable UK GDP figures and anticipation of a moderation in US CPI inflation, which may influence the FED's future actions.
Technically, the important key resistances placed in October Nifty future are at 19,842 levels, which could offer the market on the higher side. Sustainability above this zone would signal opens the door for a directional upmove with immediate resistances seen at 19,909 – 20,008 levels. Immediate support is placed at 19,737 – 19,676 levels.
