Market Movers: Tech stocks jump ahead of TCS earnings; 24 stocks in overbought zone

Market Movers: Tech stocks jump ahead of TCS earnings; 24 stocks in overbought zone

MUMBAI: After two days of tepid trading, the benchmark equity indices roared to their lifetime closing highs on Friday, led by likely buying from foreign investors and optimism over more fiscal stimulus in the US economy.

A clean majority for the Democratic Party in the US Congress and the presidential elections has led to the perception that the country will unleash large fiscal spending on infrastructure and cash doleouts to help hasten the recovery in the global economy from the Covid-19 shock.

Investors are also focussing on a sharp economic recovery at home and the possibility of major policy action from the government in the forthcoming Union Budget.

Nifty50 ended the session 1.5 per cent, or 209 points, higher at 14,347 while BSE Sensex closed at 48,782, up 689 points or 1.4 per cent.

Here are the major movers and shakers of the day’s trade:

TCS surges ahead of earnings

The stock of India’s largest IT services firm climbed nearly 3 per cent ahead of its December quarter earnings. The company is expected to report a 4 per cent quarter-on-quarter growth in revenue in constant currency terms and give a strong commentary on deal wins.

Tech stocks piggyback on TCS’s gains
Shares of other IT companies surged too, with Wipro hitting a lifetime high after 20 years, as investors poured into the sector in anticipation of strong December quarter earnings. The Nifty IT index jumped 3.6 per cent.

M&M surges on price hike

Shares of Mahindra & Mahindra soared 3.5 per cent after the company announced around 1.9 per cent price hike effective Friday on all its personal and commercial vehicles.

The raging bulls

As many as 363 stocks on NSE hit their 52-week highs during the session, suggesting broadbased buying by investors. Prominent stocks that rose to their 52-week highs included Maruti Suzuki India, Tech Mahindra, MRF and SRF.

Too much gains?

As many as 24 stocks entered the extremely overbought zone based on Relative Strength Indicators, including Wipro, Ashok Leyland, Havells India and Asian Paints.

What’s ahead for market?

Nifty50 may test the 14,500-14,600 zone next week as traders aggressively bought strike prices of both the levels Friday. In the futures segment, they added heavy long positions in January contracts of Nifty index reflecting a bullish bias. On the technical front, analysts see hurdles for the index as it headed towards the 14500 level. “The market remains overbought in the short term, and we maintain a cautiously bullish outlook unless Nifty breaks below 13,950 level,” said Nirali Shah, senior research analyst at Samco Securities.

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