Sensex, Nifty rise led by IT, Oil & Gas sectors

Stock market news: Equity benchmarks, BSE Sensex and Nifty 50, displayed strength on Tuesday, February 6, with information technology (IT) stocks leading the charge on optimism surrounding the US economy's soft landing. The rise was further bolstered by a sustained upswing in oil marketing companies.

The NSE Nifty 50 index climbed 0.72 per cent to reach 21,929.40, while the S&P BSE Sensex rose 0.63 per cent to settle at 72,186.09.

According to Avinash Gorakshakar, head of research at Profitmart Securities, "The buoyancy in domestic equities is set to continue, supported by strong liquidity, both from retail and foreign investors."

NIFTY IT surged 2.92 per cent following robust data from the US services sector, underscoring strength in the world's largest economy, which is a significant market for Indian software companies.

Meanwhile, foreign portfolio investors demonstrated interest in IT stocks, pouring in a net amount of Rs 4,485 crore in January, despite selling in other sectors.

Tata Consultancy Services and HCL Technologies both saw gains of about 4 per cent, positioning them among the top five Nifty 50 gainers.

The oil and gas index also posted substantial gains, rising 2.67 per cent for the third consecutive session. Bharat Petroleum Corporation, Hindustan Petroleum Corp, and Indian Oil Corporation saw increases ranging from 5.3 per cent to 6.2 per cent.

Since reporting their quarterly results in the final two weeks of January, BPCL, HPCL, and IOC have witnessed significant climbs of between 17 per cent and 35 per cent.

Avinash Gorakshakar further noted, "In-line quarterly results and the government's focus on fiscal prudence are likely to support sentiment in Indian markets, although bouts of profit-booking cannot be ruled out due to elevated valuations."

Paytm rebounded about 3 per cent from a record low after experiencing a slump of approximately 42 per cent in the preceding three sessions, triggered by regulatory actions against its payments bank.

Furthermore, health insurance stocks surged following a government panel's recommendation for a reduction in the goods and services tax rate on health and term insurance products. HDFC Life Insurance gained 5.22 per cent and ranked as the second-highest percentage gainer on the Nifty 50.

Vinod Nair, Head of Research, Geojit Financial Services, commented, "The market exhibited a positive breadth, registering moderate gains, with investors showing reluctance to significantly trim their positions ahead of the RBI MPC meeting. Expectations for a dovish monetary policy buoyed sentiment in the bond market. Meanwhile, Oil & Gas stocks held a modest advance as the market weighed down geopolitical risks in the Middle East and awaited improvements in the weekly US crude inventory today."

Mandar Bhojane, Research Analyst, Choice Broking, stated, "On February 6, Indian benchmark indices rebounded from the previous session's losses, closing higher with Nifty surpassing 21,900 and Sensex gaining 480 points. Both BSE midcap and smallcap indices recorded a 1 percent increase. Despite declines in the bank, FMCG, and power sectors, all other sectoral indices finished in positive territory. Auto, oil & gas, capital goods, healthcare, metal, and IT sectors saw gains ranging from 1 to 3 percent."

Bhojane added, "A technical analysis of the daily chart revealed a flat opening for the Nifty, followed by a sustained upward movement, forming a hammer candlestick pattern with substantial volume. This pattern suggests a bullish momentum in the index. There is an anticipation that the Nifty could reach an all-time high in the next few sessions, especially as the earnings season progresses into the second week."

(With Reuters inputs.)