Benchmark indices staged a strong recovery on May 23 after a cautious start, with the Sensex climbing over 900 points and the Nifty surging above 24,900 mark tracking positive global cues and strong buying in IT and FMCG shares.
The Sensex surged 953.18 points or 1.17 percent to an intraday high of 81,905.17 in early trade, and the Nifty 50 index gained 299.35 points or 1.21 percent to touch a high of 24,909.05.
Eternal, ITC, Infosys, Tech Mahindra and HCL Technologies were among the major gainers, rising up to 4 percent in intraday deals.
Key Factors Behind the Rebound
1) Firm Global Markets: Asian equities traded in the green, setting the tone for domestic gains, with indices like South Korea’s Kospi, Japan’s Nikkei 225, Shanghai Composite and Hong Kong’s Hang Seng all higher in trade. Wall Street futures too have edged higher this morning, offering support after a flat close overnight.
2) US Yields Retreat from Highs: The US market saw a volatile session on Thursday with major indices recovering from early losses, after treasury yields pulled back from recent highs. The yield on 10-year US treasuries fell 7 basis points to 4.53%. The US 30-year yields too fell after approaching levels last seen in 2007. The retreat in yields came after the US House of Representatives passed a major tax and spending bill, providing some support for equities.
3) IT Stocks Driving Gains: Technology shares led the rally after brokerage house Bernstein issued a bullish note on the Indian IT sector. The note said IT pack is poised for a turnaround, driven by a stable demand environment and an uptick in deal activity.
Among large-cap names, Infosys was highlighted as a top pick for its relative stability. In the mid and smallcap category, Coforge and Persistent Systems were favoured for their strong growth potential. Bernstein expects earnings momentum in the IT sector to improve in the current fiscal, with better guidance setting the stage for stronger revenue in FY27.
Nifty IT soars 2% as Bernstein upbeat on outlook, sees earnings revival on strong deal activity
4) Technical Rebound: Analysts said the Nifty found support near its 20-day exponential moving average (EMA), which possibly triggered a technical rebound. The index is now expected to find immediate support in the 24,400–24,500 zone, while resistance levels are seen at 24,840 and 24,946, said Devarsh Vakil, Head of Prime Research at HDFC Securities.
Disclaimer: The views and investment tips expressed by experts on Moneycontrol are their own and not those of the website or its management. Moneycontrol advises users to check with certified experts before taking any investment decisions.
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