IT stocks help Sensex regain 52,900-mark, Nifty ends above 15,850

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After a negative opening, Indian equity benchmarks reversed the losses in the early trade propelled by gains in IT stocks to settle in the green. Sensex closed at 52,904.05, up 134.32 points or 0.25%, while Nifty advanced 41.60 points or 0.26% to close at 15,853.95.

“Dalal Street Bulls looked spirited today on the back of positive global cues as US markets shrugged off early losses and 13-year high inflation data ahead of second-quarter earnings. Technology-led the rally today as some of the big IT companies prepare to roll out earnings starting today. Even as we saw profit booking in Afternoon Trade, the broader markets remained fairly vibrant as savvy investors were seen shopping across a host of B2C businesses,” said S Ranganathan, Head of Research at LKP Securities.

Gainers & losers

Sectoral strand

Nifty IT led the sectoral pack, closing over 3% higher. Mphasis (up 8.48%), Wipro (up 7.11%), Coforge (up 4.99%), Larsen & Toubro Infotech (up 5.03%), Oracle (up 3.32%), Tech Mahindra (up 2.75%), HCL Tech (up 2.30%) and TCS (up 0.88%) were among the top gainers. Nifty Pharma rose 0.32%, while Nifty Metal ended with a marginal gain of 0.08%.

On the other hand, Nifty Realty slipped 0.95% while Nifty PSU Bank lost 0.50%. Nifty Auto, Nifty FMCG and Nifty Bank fell up to  0.30%.

Broader markets

In the broader market, the BSE MidCap index gained 0.21% while the BSE SmallCap index rose 0.24%.

Buyers outpaced sellers. On the BSE, 1791 shares rose and 1448 shares fell. A total of 139 shares were unchanged.

Primary market

Meanwhile, in the primary market, the Rs 9,375-crore initial public offer (IPO) of Zomato was subscribed 57% till 3:30 PM on the first day of the issue. The retail portion was subscribed 2.4x while QIB and NII portions were at 20% and 9%.

Economy

India’s annual rate of inflation based on the Wholesale Price Index (WPI) stood at 12.07% in June 2021 (over June 2020) compared with (-)1.81% in June 2020 and 12.94% in May 2021.

The high rate of inflation in June 2021 is primarily due to the low base effect and rise in prices of mineral oils viz. petrol, diesel (HSD), naphtha, ATF, furnace oil etc., and manufactured products like basic metal, food products, chemical products etc. compared with the corresponding month of the previous year.

Meanwhile, the S&P Global Ratings on Tuesday, 13 July 2021 affirmed India’s sovereign rating at the lowest investment grade of ‘BBB-‘ for the 14th year in a row with a stable outlook and said that the country’s strong external settings will act as a buffer against financial strains despite elevated government funding needs over the next 24 months. The sovereign credit ratings on India reflect the economy’s above-average long-term real GDP growth, sound external profile, and evolving monetary settings, S&P Global Ratings stated.

Global markets

Shares in Europe and Asia declined on Wednesday, 14 July 2021, following a hotter-than-expected U.S. inflation report for June overnight.

Singapore’s economy grew 14.3% year-on-year in the second quarter, official advanced estimates showed Wednesday. Still, the economy contracted by 2% as compared with the previous quarter, Singapore’s Ministry of Trade and Industry said.

US stocks slipped after posting new highs on Tuesday as the biggest hike in U.S. inflation in 13 years rattled investors.

US inflation rose at its fastest pace in nearly 13 years, the Labor Department reported Tuesday. The consumer price index increased 5.4% in June from a year ago. Core CPI, excluding food and energy, jumped 4.5%, the sharpest move for that measure since September 1991.

Federal Reserve Chairman Jerome Powell is scheduled to appear in front of Congress Wednesday and Thursday to provide an update on monetary policy