On Monday, the Sensex surged past the 73,000 mark, propelled by a 6 percent increase in Wipro, leading to a 532-point gain, reaching 73,100. Other IT heavyweights, including Tech Mahindra, Infosys, and HCL Tech, also experienced increases of more than 2 percent.
The market rally, initially driven by momentum, is now finding support from fundamentals, according to V.K. Vijayakumar, Chief Investment Strategist at Geojit Financial Services. The sharp rebound in large-cap IT stocks, backed by slightly positive management commentary, suggests that previously underperforming segments could surprise on the upside with news of a sector turnaround.
The IT index, which rose by 5 percent on Friday, is expected to remain strong, with HCL Tech and Wipro showing further potential on the upside, added Vijayakumar. The Nifty has broken out on the upside from the consolidation range, signaling signs of a further upward move. RIL (Reliance Industries Limited) is a crucial driver of the rally, moving up due to significant delivery-based buying following the news of the commissioning of the Dhirubhai Ambani Green Energy project in the second half of 2024.
RIL, large-cap IT, and banking majors are expected to provide momentum for the bulls in the near term, he added.
Deepak Jasani, Head of Retail Research at HDFC Securities, mentioned that shares in Asia were higher, influenced by China's central bank's decision to unexpectedly keep a key interest rate unchanged. The Nifty ended at record levels, extending its winning streak for the fourth consecutive session on January 12.
Nifty reached a fresh all-time high, breaking out of the last two weeks' range and a flag pattern on daily charts. On weekly charts, it rose 0.85 percent, forming a Hanging Man pattern at the top. This indicates the possibility of a reversal on the breach of the week's low, i.e., 21,449. The Nifty could rise towards 21,990 and later 22,280 in the coming week, with supports at 21,764 and 21,449.
(With Agency Inputs)
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