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Updated January 5th, 2024 at 16:25 IST

Sensex, Nifty close marginally higher experience weekly decline as IT sector drags benchmarks

BSE Sensex closed 0.25 per cent higher at 72,026.15 and Nifty 50 closed 0.24 per cent higher at 21,710.80.

Business Desk
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Stock market news | Image:Republic World
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Stock market news: Despite marginal gains on Friday, India's benchmark indices, the NSE Nifty 50 and Sensex, closed the week with losses, primarily influenced by a decline in high-weightage information technology (IT) stocks. The Nifty 50 recorded a 0.09 per cent decrease, while the Sensex saw a 0.30 per cent dip.

BSE Sensex closed 0.25 per cent higher at 72,026.15 and Nifty 50 closed 0.24 per cent higher at 21,710.80.

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Throughout the week, IT stocks registered a 1.87 per cent decline, reflecting concerns over weak earnings prospects and diminishing expectations of early US interest rate cuts in 2024. Brokerages anticipate IT companies, heavily reliant on US revenue, to report subdued quarterly earnings due to ongoing weaknesses in client spending.

“The market ended on a flat note, tracking weak global cues, with the US 10-year yield edging higher ahead of the release of US payroll data later today, which may shape the expectation for the FED policy. Investors are also staying cautious ahead of eurozone inflation data today,” said Vinod Nair, Head of Research, Geojit Financial Services. 

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"On the domestic front, the market is moving towards the results season, and we expect the exuberance of the broader index may be tested if the December quarter earnings do not justify the valuation," Nair added.

The auto index experienced a 1.13 per cent drop, triggered by mixed monthly sales data and tax demands for companies like Eicher Motors and Mahindra and Mahindra. The rapid rise in market indices in the last two months of 2023 has prompted expectations of further consolidation, according to Saurabh Jain, Assistant Vice President of Research of Retail Equities at SMC Global Securities.

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Metal stocks faced a 1.33 per cent decline, driven by concerns over China's economic recovery and a stronger US Dollar. A robust US Dollar makes metals more expensive for buyers using other currencies.

On a positive note, realty stocks surged 7.83 per cent, marking their best week in two months. Strong quarterly updates from major players like Macrotech Developers, Sobha, and Oberoi Realty, coupled with a positive sales outlook, supported the realty sector.

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“Following a rapid rebound from its positional support at 21,500, bullish activity has resumed in the market, with buying interest evident during dips,” said Kunal Shah, Senior Technical and Derivative Analyst at LKP Securities.

“The prevailing sentiment is bullish, but Nifty encounters initial resistance at 21,750, facing selling pressure. Immediate support rests at 21,600. A conclusive close above 21,750 levels could propel Nifty towards the 22000 mark, signaling further upward movement,” Shah added.

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The Nifty 50 closed the day with a 0.24 per cent rise at 21,710.80, and the S&P BSE Sensex added 0.25 per cent to reach 72,026.15. Adani Ports and Special Economic Zone stood out with a 2.76 per cent gain on Friday, contributing to a weekly increase of 12.68 per cent, the highest among Nifty 50 stocks. Kotak Institutional Equities and HSBC raised the target price for the ports and logistics company, citing a strong earnings outlook.

(With Reuters inputs.)

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Published January 5th, 2024 at 16:16 IST

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