Updated April 26th, 2024 at 11:42 IST

Bajaj Finance drags down Indian benchmarks; IT stocks rally

As of 11:15 am, the NSE Nifty 50 was down 0.21% at 22,522.60, while the S&P BSE Sensex shed 0.26% to 74,153.83.

Reported by: Business Desk
Stock market news | Image:Republic
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Stock market news: Indian benchmark indexes struggled on Friday as a sharp decline in Bajaj Finance shares following a weak FY25 outlook weighed on financials, offsetting gains in IT stocks.

As of 11:15 am, the NSE Nifty 50 was down 0.21 per cent at 22,522.60, while the S&P BSE Sensex shed 0.26 per cent to 74,153.83.

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Both indexes initially opened about 0.25 per cent higher before fluctuating between gains and losses.

Despite the volatile start, the blue-chip indexes have recorded a 1.7 per cent gain for the week thus far, poised for their best performance since early February.

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"Indian markets are benefitting from healthy macroeconomic growth and resilient (than expected) quarterly results from corporates so far in the March quarter," remarked Anil Rego, founder and fund manager at Right Horizons.

Non-bank lender Bajaj Finance witnessed a significant decline of 7.25 per cent after its quarterly results, emerging as the top Nifty 50 loser and dragging the highest-weighted financial services index 0.6 per cent lower.

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"We estimate Bajaj Finance's loan growth to moderate in fiscal year 2025, reflecting macro trends and due to Reserve Bank of India's restrictions on two of its lending products," noted Jefferies.

In contrast, the IT index surged approximately 1.7 per cent, leading gains among major sectors. Tech Mahindra emerged as the top Nifty 50 gainer, surging 9 per cent after unveiling a three-year business plan.

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"The company's new turnaround plan looks sensible," commented analysts at HSBC, highlighting Tech Mahindra's attractive valuation compared to its peers.

"While the near-term outlook for the IT sector remains dampened due to weakness in client spending, fiscal year 2025 is expected to improve, driven by a likely demand pick-up for digital transformation and artificial intelligence solutions," added Right Horizons' Rego.

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The broader small-cap and mid-cap indexes, focusing more on domestic markets, outperformed, rising approximately 0.75 per cent. IT companies Mphasis and Zensar Technologies recorded gains of 5 per cent and 9 per cent, respectively, after reporting their March-quarter results, making them the top gainers in the small- and mid-cap indexes.

(With Reuters inputs.)

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Published April 26th, 2024 at 11:42 IST