IT stocks help bulls put up a smart show; Nifty back above 10,700

After a volatile Wednesday, it was a terrific Thursday as the bulls managed to push the benchmark indices higher by over a percent each. The S&P BSE Sensex rallied by over 400 points while the Nifty50 reclaimed 10,700 levels.

Let’s look at the final tally on D-Street – the S&P BSE Sensex rose 1.1 percent to 36471 while the Nifty50 closed with gains of 1.1 percent to 10,739.

Sectorally, IT, healthcare, banks, auto, metal stocks saw buying while selling pressure was visible in telecom and power space.

The rally in large parts was led by IT and healthcare stocks. The market breadth was in favour of declines which does not look good for the bulls. It is better to remain stock-specific rather than tracking the index movement, experts say.

“In spite of negative global cues, Indian benchmark indices gained strength as the day went on, powered by the IT index and Infosys in particular. Infosys reported better-than-expected numbers and was backed by good deal wins and decent outlook,” Vinod Nair, Head of Research at Geojit Financial Services told .

“Ground realities remained little changed, as virus infections and geopolitical tensions create uncertainty about the global economic recovery. Investors need to remain stock- specific and the earnings results and commentary should be watched out for,” he said.

The broader markets underperformed the benchmark, the S&P BSE Midcap index closed with gains of 0.7 percent while the S&P BSE Smallcap index was down 0.13 percent.

Top Nifty gainers included M&M, BPCL, Infosys and Britannia Industries.

Top Nifty losers included ZEE Entertainment, ITC, Tech Mahindra, and Bharti Infratel.

Stocks & Sectors

Sectorally, the S&P BSE IT index rose 4 percent followed by the S&P BSE Healthcare index, which was up 1.2 percent. The S&P BSE Bankex rose 1.2 percent.

Selling pressure was seen in the S&P BSE Telecom index that was down 1.5 percent and the S&P BSE Power index fell 0.96 percent.

A volume spike of more than 100 percent was seen in stocks like Dabur India, Bharti INfratel, Infosys and BPCL.

Long buildup was seen in stocks like Britannia Industries, MFSL, and Ujjivan Financial Services.

Nearly 100 stocks hit a fresh 52-week high. These included Britannia Industries, TCS, L&T Infotech, Dr. Lal Pathlabs and Infosys.

Stocks in news

Infosys stock surged over 9 percent after the company declared its June quarter numbers. CLSA, Nomura and Citi initiated a buy call on the stock and have also raised the target price.

Larsen & Toubro Infotech share price jumped almost 5 percent, hitting a fresh all-time high of Rs 2,340 on July 16.

Federal Bank stock was up over 4 percent after the lender reported a 4.3 percent rise in its standalone net profit to Rs 400.77 crore for the June quarter.

Titagarh Wagons shares jumped 5 percent after the company acquired shares held by Matiere S.A.S., France.

Yes Bank stock was down over 6 percent following its FPO, which has been subscribed 43.75 percent on the second day of bidding.

Bajaj Consumer stock surged 20 percent after the company reported a net profit at Rs 54.19 crore in Q1FY21 against Rs 24.52 crore in Q4FY20.

Technical View

The Nifty formed a Hammer pattern on the charts.

The index has been respecting its rising support trend line. The Nifty needs to hold above 10,700 to witness a bounce towards 10,850- 10,900 zone while on the downside, support is seen at 10,600 then 10,550 levels, say experts.

India VIX fell down by 3.53 percent at 25.36 levels. Overall, lower volatility is ruling out major decline but suggests a limited upside as well.

On the options front, maximum Put OI is at 10,000 followed by 10,500 strikes, while maximum Call OI is at 11,000 followed by 11,500 strikes.