Financials and IT stocks lift Sensex, Nifty to fresh peaks

Stocks on Monday ended the day at all-time highs on Tuesday, defying global trends after correction in the US markets in the previous trading session. The 50-share Nifty rallied by 66.6 points (0.47%) to close at 14,199.5, while the Sensex rallied by 260.98 points (0.54%) to close at 48,437.38. Markets rallied on the back of strong buying witnessed in the broader markets as well as financial and IT stocks. Wall Street slid in the previous trading session, on account of the Georgia run-off election on concerns over a Democratic majority in the Senate. While the Indian markets did react to the sombre mood on Wall Street, equities recovered smartly on Tuesday and ended the trading session at record highs.

European markets however, were trading muted with bourses in countries such as the United Kingdom, France, and Germany down between 0.03% to 0.26%. The Dow Jones mini futures were down by 53 points during press time.
Asian markets, however, settled higher with the stock markets in China, Taiwan and South Korea rallying by 0.73% to 1.57%. Deepak Jasani, head – retail research, HDFC Securities, said, “Most Asian markets reversed early losses Tuesday as hopes for the economic outlook outdid worries over a coronavirus surge, new lockdowns, a slow vaccine rollout and uncertainty over US Senate elections.”

Shares of HDFC hit their 52 week highs intraday on Tuesday as the company released its business update in which it stated that its individual loan disbursements rose 26% in the third quarter ending December 2020. The share price of HDFC rose by 2.96% to close at Rs 2,654.95.  Motilal Oswal in its report said, “HDFC remains one of our preferred picks in the sector. HDFC has built in large provision buffers to help it sustain a spike in NPLs in the coming quarters. We expect the company to deliver core RoE of 12–14% over the medium term.”

Similarly, stocks belonging to the IT sector rallied ahead of the third quarter results that TCS announced. Both Nifty Financial Services and Nifty IT were up by 1.23% and 2.62%. Foreign portfolio investors (FPIs) bought stocks worth $131.5 million whereas, domestic institutional investors sold stocks worth $65.3 million. In the last two trading sessions of January alone, FPIs have bought Indian equities worth $539.44 million.

The futures and options segment saw a turnover worth Rs 27.72 lakh crore whereas, the cash market saw a turnover worth Rs 67,635.29 crore. This is against the six month average of Rs 24.1 lakh crore in the futures and options segment and Rs 54,497 crore in the cash market. The biggest gainers on the Nifty were Axis Bank, HDFC, IndusInd Bank, HDFC Life, and Wipro up by 6.32%, 2.96%, 2.67%, 2.54%, and 2.30%. The biggest losers on Nifty were ONGC, JSW Steel, Hindalco, Tata Steel, and Bajaj Finance, down by 1.96%, 1.87%, 1.77%, 1.73%, and 1.60%.