Sensex, Nifty erase early losses as IT stocks rally on Q2 results

At around 10:04 am, the BSE Sensex was trading at 74,470.20, up 154.59 points or 0.21%. The index had opened at 74,341.08 and slipped to an intraday low of 74,012.99 before recovering. The NSE Nifty 50 was at 23,054.55, up 57.20 points or 0.25%, after opening at 23,065.10.

In Short

• Markets recovered from early losses on October 16
• Volatility index rose amid global AI stock concerns
• IT stocks Tech Mahindra, Infosys, TCS led gains

Stock markets recovered from early losses on Friday, October 16, as gains in information technology stocks helped benchmark indices turn positive, even as selling pressure persisted across several sectors. Tech Mahindra, Infosys and TCS led the IT rally after better-than-expected quarterly results from technology companies lifted sentiment.

At around 10:04 am, the BSE Sensex was trading at 74,470.20, up 154.59 points or 0.21%. The index had opened at 74,341.08 and slipped to an intraday low of 74,012.99 before recovering. The NSE Nifty 50 was at 23,054.55, up 57.20 points or 0.25%, after opening at 23,065.10.

The recovery followed a strong rally in the previous session, when the Sensex surged more than 1,500 points and the Nifty gained 1.66%. However, Friday's gains remained concentrated in select heavyweight stocks, with several sectors and broader-market segments trading lower.

IT STOCKS LEAD GAINS

Technology stocks were the biggest support for the benchmarks in early trade. Tech Mahindra surged 7.11%, while Infosys rose 3.71% and TCS gained 3.19%. Bharti Airtel advanced 1.83%, while HCLTech was up 0.88%.

The Nifty IT index gained 2.89%, with buying extending across several technology stocks. Wipro rose 4.68%, Infosys gained 3.87% and TCS advanced 3.45%, according to the latest sectoral data available at around 10:05 am.

Other notable gainers included Mahindra & Mahindra, up 1.81%, and Titan, up 0.31%. However, Reliance Industries fell 1.82%, while ITC declined 0.98%. ICICI Bank lost 0.80%, Bajaj Finance fell 0.76%, and Asian Paints declined 0.72%. Bharat Electronics was down 0.59%.

BROADER MARKETS REMAIN UNDER PRESSURE

The broader market performance was mixed. The Nifty 100 rose 0.21%, the Nifty 200 gained 0.09% and the Nifty 500 edged up 0.04%. In contrast, the Nifty Midcap 50 fell 0.41%, the Nifty Midcap 100 declined 0.37% and the Nifty Smallcap 100 slipped 0.13%.

Sectoral trends also showed a divergence. The Nifty IT index rose 2.89%, while the Nifty Media index gained 1.73%, the Nifty Auto index advanced 0.50% and the Nifty Metal index rose 0.55%.

On the other hand, the Nifty FMCG index fell 0.63%, the Nifty Financial Services 25/50 index declined 0.36%, and the Nifty Pharma index slipped 0.34%. The Nifty Oil and Gas index lost 0.99%, while the Nifty MidSmall Financial Services index fell 1.01%.

The India VIX rose 1.01% to 14.17, indicating a modest increase in expected market volatility.

The IT rally followed stronger-than-expected quarterly revenue from Tech Mahindra and Wipro, helping offset profit booking in other parts of the market. Tech Mahindra's results were supported by robust deal wins, while Wipro's revenue performance beat estimates and its commentary on delayed large deals offered some support to sentiment.

Investors were also assessing the impact of weakness in global technology stocks linked to concerns over artificial intelligence valuations. The previous session's market rally had been supported by a rebound in the global AI trade and earnings-related moves.

The key question for the market is whether strength in IT and other heavyweight stocks can broaden into mid-cap, small-cap and financial stocks, where early trading remained weak.

(Disclaimer: The views, opinions, recommendations, and suggestions expressed by experts/brokerages in this article are their own and do not reflect the views of the India Today Group. It is advisable to consult a qualified broker or financial advisor before making any actual investment or trading choices.)

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