IT rally rescues Nifty from gap-down abyss; crude surge keeps bulls on edge
AI Summary
The Indian markets showed a partial recovery from a significant morning sell-off, primarily driven by a rally in IT stocks, with the Nifty 50 gaining 0.05% by midday. TCS led the recovery with a 6.16% increase, while broader market breadth improved slightly. However, concerns over rising jet fuel costs and geopolitical tensions continue to weigh on certain sectors, including steel and aviation.
Markets staged a partial recovery from a steep morning sell-off by midday Monday, with a broad-based rally in information technology stocks helping the Nifty 50 claw back most of its early losses. At 1.12 PM, the Nifty was trading at 24,218.90, up 12 points or 0.05% from its previous close of 24,206.90 — a remarkable turnaround from an opening gap-down near 24,027.
The session began on a weak note, with the Sensex gapping down over 600 points and the Nifty breaching the psychologically significant 24,000 mark, as investors reacted to fresh US military strikes on Iran over the weekend that threatened supply disruptions through the Strait of Hormuz. Buyers, however, moved in at lower levels, absorbing the selling pressure led almost entirely by large-cap IT names.
TCS surged 6.16% to ₹2,196.40 from a previous close of ₹2,069.00, becoming the single largest contributor to the recovery and trading on volumes exceeding 94 lakh shares worth over ₹2,02,925 lakh. HCL Technologies rose 5.95% to ₹1,233.40 against a previous close of ₹1,164.10, while Tech Mahindra gained 4.64% to ₹1,522.30 from ₹1,454.80. Infosys advanced 4.31% to ₹1,114.00 from ₹1,068.00, with volumes crossing 1.34 crore shares. Wipro added 2.41%, trading at ₹179.69 against its previous close of ₹175.46.
“The frontline indices began the week with a 200-point gap-down. However, buyers intervened at lower levels, diminishing the gap considerably, led by frontline IT companies with TCS up more than 5%,” said Sudeep Shah, Head of Technical and Derivatives Research at SBI Securities.
On the losing side, Tata Steel fell 2.07% to ₹187.23 from ₹191.19 on heavy volumes of over 3.35 crore shares. IndiGo declined 1.97% to ₹5,207.50 from a previous close of ₹5,312.00, hit by rising jet fuel cost concerns. Grasim Industries dropped 1.82% to ₹3,155.00 from ₹3,213.60. In the FMCG space, Tata Consumer Products fell 1.52% to ₹1,095.00 from ₹1,111.90, and Nestle India declined 1.44% to ₹1,434.30 from ₹1,455.20.
Broader market breadth was mixed but improving, with 1,758 stocks advancing against 1,716 declining out of 3,695 traded. The Nifty’s Advance-Decline ratio stood at 16:34, per SBI Securities. 108 stocks hit 52-week highs while 34 touched 52-week lows.
Spot gold slipped 1.50% to $4,059.11 per ounce, or approximately ₹1,41,980 per 10 grams, as a firmer dollar and elevated Treasury yields reduced demand for non-yielding assets. Silver dropped 2.90% to $58.14 per ounce, or around ₹2,19,740 per kg. WTI crude surged 4.40% to $74.62 per barrel, with MCX Crude trading above ₹7,100, as fears of Strait of Hormuz supply disruptions intensified.
The Indian rupee weakened to ₹95.7 against the dollar, breaching its recent ₹95.2–₹95.5 consolidation band, adding pressure on import-sensitive sectors.
Technically, Shah identified 24,000–24,020 as crucial Nifty support and 24,250–24,270 as near-term resistance, with Sensex support at 77,000 and resistance at 77,800. Options data showed meaningful call writing at the 24,200 and 24,300 strikes, with substantial put open interest at 24,100 and 24,000 — a setup that keeps the index range-bound as the afternoon session progresses.
Original Article
Published on Hindu BusinessLine