IT stocks rally despite bearish market sentiment; FII selling persists
Indian equity markets opened lower on Friday, with the Sensex opening at 77,682.59, up from its previous close of 77,620.21, but is currently trading lower at 77,339.94, down by 280.27 points or 0.36 per cent. Similarly, the Nifty opened at 23,551.90, higher than its previous close of 23,526.50, but declined to 23,413.40, losing 113.10 points or 0.48 per cent.
Technology stocks led the gains following TCS’s quarterly results, with the IT major surging 4.09 per cent. Other tech stocks followed suit, with Tech Mahindra rising 2.57 per cent, Wipro gaining 1.73 per cent, Infosys up 1.70 per cent, and HCL Tech advancing 0.73 per cent.
On the flip side, Shriram Finance led the losses, dropping 3.43 per cent, followed by Adani Enterprises (-2.55 per cent), IndusInd Bank (-2.40 per cent), NTPC (-2.20 per cent), and BEL (-2.19 per cent).
FII selling remained a major concern, with overseas investors offloading equities worth ₹7,170 crore on January 9, taking their total selling in January to ₹19,102.80 crore. However, domestic institutional investors (DIIs) provided some support, purchasing shares worth ₹7,639 crore.
“In the context of the looming uncertainty regarding President Trump’s likely actions, the market is unlikely to rally in the near-term. There appears to be no respite to the sustained FII selling,” said Dr. V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
The Indian rupee hit a new low of 85.93 against the dollar in early trading before recovering slightly to 85.89, likely due to RBI intervention, adding to market concerns.
The market sentiment was further dampened by subdued Q3 earnings expectations. “The top-line growth of listed companies is expected to remain lukewarm for the seventh consecutive quarter, and y-o-y margins will be under pressure with only 10 per cent growth for the third consecutive quarter,” noted VLA Ambala, Research Analyst and Co-Founder of Stock Market Today.
Sector-wise, automobiles, banks, consumer staples, oil, and construction materials are expected to record weak profits with single-digit growth, while pharma, real estate, capital goods, and telecommunications could see strong PAT growth.
Despite the overall bearish sentiment, retail participation in equity markets showed strength, with SIP inflows crossing ₹26,000 crore for the first time in December. “Inflows into equity mutual funds increased by 14 per cent last month to ₹41,156 crore, despite higher intra-day volatility in recent months, indicating that domestic investors remain confident in the market,” said Mr. Vikas Jain, Head of Research at Reliance Securities.
Technical analysts suggest immediate support for Nifty at 23,400, followed by 23,300 and 23,200, while resistance levels are seen at 23,600, 23,700, and 23,800. “The current market texture is weak but oversold, thus a strong possibility of a pullback rally from the current levels cannot be ruled out,” said Shrikant Chouhan, Head Equity Research, Kotak Securities.
In global markets, Asian indices showed mixed trends, with the Nikkei trading lower on disappointing earnings results, while Hang Seng opened strong but later traded flat. Oil prices rose 1 per cent to above $77 per barrel, while gold traded near $2,670 an ounce as traders awaited key US jobs data.
