Sensex, Nifty reverse early fall as IT stocks pare losses; auto, financial names lend support

The Sensex, Nifty 50 witnessed volatile moves in early trade today.

Indian benchmark indices—the 30-stock Sensex and Nifty 50, reversed early losses after information technology stocks pared initial losses. In addition, gains in automobile and financial names further lifted the indices higher.

Information technology stocks came under pressure after weaker-than-expected second quarter revenue growth guidance by as global IT major Accenture, capping gains for broader Nifty 50 index.

At 10.40 am, the Sensex was up 375.08 points or 0.49 percent at 76,723.14, and the Nifty was up 123.50 points or 0.53 percent at 23,314.15. About 2,599 shares rose, 703 fell, and 123 remained unchanged.

With the Federal Reserve's March meeting behind, some caution also made way back into markets as US President Donald Trump's reciprocal tariffs are set to kick in from April 2. Despite those concerns though, the Indian equity market has showcased resilience in the month so far.

"The rally in the market this week which saw the Nifty rise by 3.5 percent has come at a time when trade tensions are escalating and more is expected when the reciprocal tariffs kick in on April 2. The main driver of the rally is the buying by FIIs in the cash market in two days and perhaps, more importantly, sharp decline in their short positions and increase in long positions in the futures market," V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services said.

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FIIs turned net buyers of Indian equities for the first time in a month on March 18. However, they resumed their selling in the next session but ended by turning net buyers in the last session. "It appears that this has given confidence to retail investors who have resumed buying in the broader market," Vijayakumar added.

The broader markets enjoyed the strong buying from retail investors, which lifted the Nifty Smallcap 100 and Nifty Midcap 100 indices 1-2 percent higher each.

On the sectoral front, all indices traded in the green. the Nifty IT index reversed losses and jumped back into the green. However, heavyweight names like HCLTech, Infosys, TCS, Wipro and Tech Mahindra snapped a three-session winning streak as global information technology player Accenture’s second quarter revenue guidance fell short of investor expectations. Despite the fall though, these stocks were sharply off their day's lows.

Accenture is widely considered as a benchmark for Indian IT companies, offering insights into their likely performance. Accenture’s earnings report is a key indicator for the IT industry globally, including the Indian tech firms that rely heavily on services exports for revenue.

Aside from that, Nifty Realty came out as the top sectoral gainer, surging over 2 percent. Others like Nifty Energy, Nifty Auto, Nifty Infra, Nifty Pharma, Nifty Media, Nifty Media and Nifty PSU Bank rose 1-2percent.

On the technical front, Shrikant Chouhan, Head of Equity Research, Kotak Securities, remarked the the Nifty 50 has successfully crossed its 50-day SMA (simple moving average) level and the 23,000 resistance zone, which is largely positive.

Among specific stocks, Bajaj Finance surged to a record high after its Managing Director, Rajeev Jain, was elevated to the board of Bajaj Finserv in an executive capacity. In his new role, Jain will continue to oversee Bajaj Finance while also contributing to the group’s newer initiatives, including healthcare, and supporting the transition within its insurance businesses. Bajaj Finserv, which promotes Bajaj Finance, holds a 54 percent stake in the Rs 3.25 lakh crore lending arm.

"Additionally, the index formed a bullish candle on the daily chart, supporting further upside from current levels. We believe the overall market sentiment is bullish, but buying on dips and selling on ups would be the ideal strategy for day traders," Chouhan said. In the near term, he sees 23,100 and 23,000 or (50-day SMA) as the key support zones, while 23,300 and 23,400 may act as key resistance zones for the Nifty.