TCS, India’s most-valued information technology company, hit a market-cap of ₹12 trillion during Monday’s equity trading session. It was the first time the Sensex, India’s benchmark stock index, crossed 49,000 level and came within a striking distance of the 50,000 mark on the back of the longest rally in more than a decade.
The Sensex closed with gains of 486 points, or 1 per cent, at 49,269. The Nifty 50 index gained 137 points, or 0.96 percent, at 14,484. IT shares are expected to outperform December-quarter earnings estimates, analysts said.
This is after Tata Consultancy Services reported surprisingly good earnings last Friday, recording a 7 per cent year-on-year increase in net profit, for the quarter ended December 31, at ₹8,701 crore. The company said it had benefited from higher demand for its cloud services during the Covid-19 lockdown. The revenues for the last quarter rose 5.42 per cent y-o-y to ₹42,015 crore. Since April 2020, the share price of TCS has gained 72.8 per cent while the BSE IT index is up 108.30 percent, making it the best-performing index of India.
Positive stance
Despite a record bull run in the global markets, market analysts are still bullish.
“The anticipation of a better-than-expected earnings season, combined with supportive global cues, aided the upbeat start. Going forward, stock-specific volatility will remain high as earnings season will gain pace. Further, key macro data such as CPI, WPI and IIP will also be actively tracked by investors. Amid all, we reiterate our positive, yet cautious, stance on markets and advise aligning positions according to the prevailing trend,” said Ajit Mishra, VP Research, Religare Broking.
“The short-term trend of Nifty (50) continues to be positive. There is a possibility of some more up-move or range movement for the next 3-4 sessions, before showing a sharp one day of decline from the new highs. The next upside levels to be watched are at 14,600-14,800. The immediate support is placed at 14,380,” said Nagaraj Shetti, Technical Research analyst at HDFC Securities.
In January, foreign portfolio investors have so far purchased stocks worth ₹12,403 crore. In the index futures and the stock futures segments, they have made stock purchases worth ₹200 crore and ₹2,843 crore, respectively.