IT stocks fire up markets

October 9, 2020 6:15 AM

Foreign portfolio investors (FPIs) have been buyers of stocks in October so far ($584 million till October 7) having sold equities worth $767 million in September.

The Nifty IT gained as much as 3.23% on Thursday to close the session at a 16-year high after Tata Consultancy Services reported stellar Q2FY21 results suggesting the worst may be over for the sector.Analysts believe that the response gathered by the UTI AMC IPO could have resulted from the concern about recent outflow of Assets Under Management.

By Urvashi Valecha

With IT stocks on fire, the Sensex on Thursday, rose for the sixth straight session, surging to a seven-month high. The benchmark rallied 303.72 points (0.76%) to close at 40,182.67, the highest levels since February 25; it is now just 1,770 points or 4.2% away from its January peak. More than half the gains in the last six sessions have come from the rise in prices of HDFC Bank, HDFC and Tata Consultancy Services (TCS). The Nifty IT gained as much as 3.23% on Thursday to close the session at a 16-year high after Tata Consultancy Services reported stellar Q2FY21 results suggesting the worst may be over for the sector. The IT major announced a Rs 16,000-crore buyback. Wipro, which gained 7.34% on Thursday to close at Rs 359, is also mulling a buyback. Foreign portfolio investors (FPIs) have been buyers of stocks in October so far ($584 million till October 7) having sold equities worth $767 million in September.

Meanwhile, ahead of the monetary policy announcement by the Reserve Bank of India (RBI) on Friday, the bond markets appeared calm; the yield on the benchmark closed at 6.02%, more or less flat compared to Wednesday’s close. Dealers expect the central bank to leave the policy rate unchanged at 4%.

The rupee ended the day stronger by nine paise at 73.24 against the dollar. In the next month, the trajectory of the Indian currency is expected to be determined more by the performance of the dollar rather than by local factors.

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