Sensex, Nifty open higher after sharp sell-off; IT stocks lead gains, TCS jumps 3%

The BSE Sensex rose 449.84 points, or 0.63%, to 72,043.08 at 9:32 am. The Nifty 50 gained 150.95 points, or 0.68%, to 22,382.75 at 9:33 am. It opened at 22,314.95 and hit an early high of 22,388.70.

In Short

• IT stocks led gains with TCS rallying post latest quarterly results
• Broader markets mostly up, smallcap segment slipped slightly
• Experts suggest cautious optimism amid volatile global factors

Stock markets opened higher on Friday, October 9, as the Sensex and Nifty staged a rebound after a sharp sell-off in the previous session. IT stocks led the recovery, supported by gains in Tata Consultancy Services (TCS) following its September-quarter results.

The BSE Sensex rose 449.84 points, or 0.63%, to 72,043.08 at 9:32 am. The index opened at 71,776.67 and touched an early high of 72,060.51.

The Nifty 50 gained 150.95 points, or 0.68%, to 22,382.75 at 9:33 am. It opened at 22,314.95 and hit an early high of 22,388.70.

The rebound followed Thursday's sharp decline, when the Sensex plunged 1,045 points, or 1.44%, to close at 71,593.24, while the Nifty fell 371 points, or 1.64%, to settle at 22,231.80. Both benchmarks came under pressure amid concerns over rising crude oil prices, foreign investor outflows and the Reserve Bank of India's tighter monetary policy stance.

IT STOCKS LEAD GAINS

The Nifty IT index rose 2.27% in early trade, emerging as the best-performing sectoral index among those shown in the market data. TCS shares were in focus after the company reported its September-quarter results on Thursday and issued a statement saying the US suspension of the green-card programme was not expected to affect its workforce strategy or customer engagements.

The company said its applications under the US Permanent Labour Certification (PERM) programme had been in single digits over the past two years. It also reiterated its plan to hire an additional 15,000 people in the US over the next five years.

Investors are assessing the results alongside the potential implications of the US government's action against several major technology companies. The Nifty IT index's early gains suggest a positive response to the sector, although the sustainability of the recovery will depend on broader market sentiment and the outlook for technology spending.

BROADER MARKETS ALSO RECOVER

The broader market indices traded largely higher in early deals. The Nifty 100 and Nifty 200 rose 0.52% each, while the Nifty 500 gained 0.42%. The Nifty Midcap 50 advanced 0.46%, and the Nifty Midcap 100 rose 0.54%.

However, the Nifty Smallcap 100 slipped 0.35%, indicating that the recovery was not uniform across market segments. India VIX, the market's volatility gauge, fell 3.43% to 14.75.

Among sectoral indices, the Nifty FMCG gained 1.18%, while the Nifty PSU Bank rose 1.13%. The Nifty Financial Services 25/50 advanced 0.83%, and the Nifty Private Bank index climbed 0.89%. The Nifty Financial Services Ex-Bank and Nifty MidSmall Financial Services indices rose 0.68% and 0.69%, respectively.

The Nifty MidSmall IT and Telecom index gained 1.41%, while the Nifty Media rose 0.71% and the Nifty Metal advanced 0.56%. The Nifty Auto, Realty, Healthcare, Consumer Durables and Chemicals indices also traded higher.

Pharma and Oil and Gas were among the sectors in the red, declining 0.35% and 0.32%, respectively.

CRUDE OIL, FII SELLING REMAIN KEY RISKS

Despite the early recovery, elevated crude oil prices and foreign institutional investor (FII) selling remain important risks for the market.

Brent crude was trading at $102.91 per barrel, down 1.31%, while US West Texas Intermediate crude fell 1.14% to $90.45, according to the market data provided. The decline offered some relief after the recent surge in oil prices, although both benchmarks remained elevated.

Dr V K Vijayakumar, Chief Investment Strategist at Geojit Investments Limited, said high crude prices and elevated US bond yields continued to weigh on Indian equities. He said these headwinds had shifted the near-term market structure towards a “sell on rally” approach.

“Given the elevated crude prices and high US bond yields, FIIs are likely to continue selling in the near-term, irrespective of the favourable valuations, particularly of the large-caps,” Vijayakumar said.

He added that FIIs had sold equities worth Rs 36,210 crore through exchanges in October so far.

However, Vijayakumar said the ongoing correction could create opportunities for patient, long-term investors to accumulate high-quality stocks at more favourable valuations.

For the market, the key question is whether Friday's early gains mark the beginning of a sustained recovery or remain a technical rebound after Thursday's sharp decline. Investors will continue to track crude oil prices, foreign fund flows, global bond yields and developments around corporate earnings.

(Disclaimer: The views, opinions, recommendations, and suggestions expressed by experts/brokerages in this article are their own and do not reflect the views of the India Today Group. It is advisable to consult a qualified broker or financial advisor before making any actual investment or trading choices.)

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