The Indian stock market has witnessed a historic surge as the BSE Sensex crossed the remarkable milestone of 73,000 points and the NSE Nifty soared past 22,000 points on January 15. This surge is attributed to the impressive performance of companies in the information technology sector during the declaration of their Q3 results.
During the early trading hours of January 15, the Sensex reached a new record-high at 73,108.31, while the Nifty opened at an all-time high of 22,053.15. This surge follows the closing of the previous market session at 21,189 last week. The early trade hours on Monday marked a significant boom for both indices, with IT companies leading the rally after the release of strong Q3 results.
Wipro, one of the prominent players in the IT sector, emerged as a major contributor to the Sensex surge by witnessing a remarkable jump of nearly 14 percent in its shares. This surge added ₹18,168.68 crore to Wipro’s market valuation. The company’s robust performance during the December quarter exceeded market estimates, making it the top gainer on January 15. Other notable contributors to the Sensex surge included Tech Mahindra, HDFC Bank, and SBI.
Key players in the IT sector, including Wipro, Tata Consultancy Services (TCS), HCL Technologies, and Infosys, played a pivotal role in propelling the Sensex and Nifty to new heights. The release of Q3 results by these companies in January 2023 significantly influenced the positive momentum in the stock market.
V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, highlighted that the surge in the Indian stock market is a result of the consistent rise in IT stocks over the past few weeks, primarily driven by the Q3 results. He emphasized that the market rally, initially fueled by momentum, is now gaining support from strong fundamentals. Large-cap IT stocks experienced a sharp bounce, fueled by slightly positive management commentary, indicating that the sector is witnessing a turnaround.
HCL Technologies, in particular, reported a 6.2 percent increase in consolidated net profit at ₹4,350 crore for the three months ended December 2023. This marked the highest quarterly profit for the company, driven by growth in both services and software businesses.
Vijayakumar noted that the market rally, initially driven by momentum, is now being reinforced by positive fundamentals. The significant uptick in large-cap IT stocks, coupled with encouraging management commentary, suggests that the previously underperforming segment is surprising on the upside.
Looking ahead, the Q3 results of several prominent tech and IT firms are yet to be announced in January 2023. Analysts anticipate that these upcoming results will continue to drive the markets upward until the end of the month. The overall sentiment in the market reflects a blend of positive momentum and strong fundamental support, creating an optimistic outlook for investors in the Indian stock market.
In conclusion, the surge in the Sensex and Nifty to record highs is primarily attributed to the stellar performance of IT giants like Wipro, TCS, HCL Technologies, and Infosys during the Q3 results season. The positive momentum, coupled with strong fundamentals, has contributed to the remarkable rally in the Indian stock market, making it an interesting period for investors.