Markets End Flat: IT Stocks Lift Indices Amid Late-Session Profit Booking
The Indian stock market witnessed a mixed day of trading on Tuesday, with the benchmark indices ending flat after a volatile session. The BSE Sensex closed at 39,113.47, up by 7.09 points, while the NSE Nifty 50 ended at 11,559.25, up by 6.45 points. The markets started the day on a positive note, but profit booking in the last hour of trading led to a flat closing.
However, the highlight of the day was the performance of the IT sector, which lifted the indices amid the late-session profit booking. The IT index was the top gainer, closing 2.5% higher, followed by the Nifty IT index, which ended 2.3% higher. The surge in the IT stocks was driven by the positive global cues and strong quarterly results of major IT companies.
The positive sentiment in the IT sector was also reflected in the broader market, with the BSE IT index outperforming other sectoral indices. This can be attributed to the fact that the IT sector has been one of the least affected sectors by the ongoing pandemic. The increasing demand for digital transformation and remote working solutions has led to a surge in the IT sector’s growth, making it a preferred choice for investors.
Among the top gainers in the IT sector were Infosys, TCS, HCL Technologies, and Wipro, which reported better-than-expected quarterly results. Infosys, the country’s second-largest IT company, reported a 12.4% increase in its net profit for the quarter ended September 2020. TCS, the largest IT company in India, also reported a 7.2% growth in its net profit for the same period. The strong performance of these companies has boosted the confidence of investors in the IT sector.
Apart from the IT sector, the pharma and metal sectors also contributed to the positive sentiment in the market. The BSE Healthcare index ended 1.5% higher, while the BSE Metal index closed 1.4% higher. The rise in these sectors was driven by the increasing demand for healthcare products and the rise in metal prices globally.
On the other hand, the banking and financial sectors witnessed a decline, with the BSE Bankex and BSE Finance index ending 0.9% and 0.7% lower, respectively. This can be attributed to the ongoing concerns over the rising number of COVID-19 cases and its impact on the economy. The uncertainty surrounding the loan moratorium and the rising NPAs have also affected the sentiment of investors in the banking sector.
The overall market sentiment was also affected by the ongoing tensions between India and China, with the border dispute between the two countries escalating. However, the positive global cues, with the US markets reaching record highs, helped in limiting the losses in the Indian stock market.
Despite the late-session profit booking, the market experts remain optimistic about the future of the Indian stock market. They believe that the ongoing earnings season and the upcoming festive season will drive the market’s growth. The government’s efforts to boost the economy and the recent reforms in the agricultural sector are also expected to have a positive impact on the market.
In conclusion, the Indian stock market ended flat on Tuesday, with the IT sector leading the gains amid late-session profit booking. The strong quarterly results of major IT companies and positive global cues have boosted the sentiment in the market. With the ongoing earnings season and the upcoming festive season, the market is expected to witness further growth in the coming days. As always, it is advisable for investors to make informed decisions and consult with their financial advisors before making any investment decisions.
