Rakhi Rally On Dalal Street: IT stocks shine as Nvidia-fuelled global tech rally lifts equities

Mumbai: Benchmark equity indices rebounded on Friday after two sessions of losses, helped by strong buying in IT stocks and positive global market cues.

The 30-share BSE Sensex climbed 330.92 points, or 0.43 per cent, to settle at 77,264.51. During the day, it advanced 424.38 points, or 0.55 per cent, to 77,357.97.

The NSE Nifty rose 84.80 points, or 0.35 per cent, to close at 24,175.65.

IT stocks led the recovery, with the Nifty IT index surging 3.5 per cent. TCS, Infosys, Tech Mahindra and HCL Technologies were among the major gainers on the Sensex. Titan and Eternal also advanced.

The rally in technology stocks followed strong results and an upbeat outlook from US chipmaker Nvidia, which renewed optimism over sustained artificial intelligence-related spending. Global markets also provided supportive cues.

“Strong gains in IT stocks helped Indian equities close higher today. The sector was supported by Nvidia’s strong earnings and upbeat outlook, which reinforced optimism around sustained AI-related investments and benefited firms involved in enterprise AI deployment and workflow integration,” Vinod Nair, Head of Research, Geojit Investments Ltd, said.

However, investors remained selective ahead of comments from the US Federal Reserve Chair at the Jackson Hole symposium, which could provide clues on the interest-rate outlook and global liquidity conditions. According to Hariselvan Radhakrishnan, Founder & CEO of HST Wealth, supportive global cues helped investors turn positive on IT stocks.

The BSE MidCap Select index gained 0.48 per cent, while the SmallCap Select index edged up 0.02 per cent.

Among BSE sectoral indices, Focused IT rose 3.42 per cent, Information Technology 3.32 per cent, PSU Bank 1.25 per cent, Bankex 1.01 per cent and Metal 0.71 per cent.

Despite Friday’s recovery, the Sensex declined 276.32 points, or 0.35 per cent, over the week, while the Nifty fell 76.35 points, or 0.31 per cent. Brent crude fell 0.17 per cent to USD 89.63 a barrel. FIIs sold equities worth Rs 298.26 crore on Thursday. 

Why markets rebounded

♦ IT stocks surged: Nifty IT jumped 3.5%, leading the recovery

♦ Nvidia boost: Strong results and an upbeat AI outlook revived optimism over global technology spending

♦ Global cues improved: US technology stocks rallied after Nvidia’s results, supporting Indian IT counters

♦ Two-day correction attracted buying: Investors bought beaten-down large-cap IT stocks after the Sensex had fallen sharply on Thursday

♦ Fed remains a risk: Gains were restrained as investors awaited the Fed Chair’s Jackson Hole comments on rates and liquidity.