Indices rebound as IT stocks drive gains after three-day loss

Mumbai: India’s equity indices bounced back on Monday in a relief rally after three days of consecutive losses, led by gains in Information Technology (IT) stocks. Analysts attributed the gains to a technical bounce and anticipate the market to remain in a range amid a lack of fresh triggers, as the earnings season draws to a close.

The NSE Nifty finished at 25,574, up 0.3%, or 82 points. The BSE Sensex ended at 83,535, 0.4% or 319 points lower.

“There was some follow-up buying but the selling pressure at higher levels of the 10-day moving average of 25,650 levels, which capped the gains in the market,” said Shrikant Chouhan, head of research, Kotak Securities.

Chouhan said benchmark Nifty is expected to trade in a range of 25,300 -25,700 due to a lack of momentum.

Infosys emerged as the top gainer in Nifty and gained 2.6% on Monday. HCL Technologies rose 1.8%. The Nifty IT index climbed 1.6%. Nifty Pharma Index moved around 1% higher.

Chouhan said investors are turning cautious on US-based AI stocks given the euphoric valuations that allude to a bubble in these stocks. “Investors and funds are shifting funds to IT stocks as they offer limited downside and are trading at attractive valuations,” he said. Foreign portfolio investors (FPIs) sold shares worth a net ₹4,114.85 crore on Monday. Their domestic counterparts bought shares worth ₹5,805.26 crore. In November, global investors bought shares worth ₹4,939.67 crore.

At home, the Nifty Mid-cap 150 advanced 0.5% while the Small-cap 250 index ended flat. Out of the 4,513 shares traded on BSE, 1,918 advanced, while 2,423 declined.