Nifty closes above 23,400 as IT rally powers late rebound; Sensex up 382 points
New Delhi, June 2
Indian benchmark indices ended higher in a volatile session on Tuesday after trading in the red for most of the day, with the Nifty 50 closing comfortably above the 23,480 mark on a late pullback led by heavyweight IT stocks.
At close, the Sensex was up 382.50 points or 0.52 per cent at 74,649.84, and the Nifty was up 100.95 points or 0.43 per cent at 23,483.55.
The Nifty opened with a downside gap and tested prior swing low support, which also turned out to be the day's low, according to Sudeep Shah, Head - Technical and Derivatives Research at SBI Securities. The index then staged a steady pullback to close at 23,483, forming a bullish candle on the daily chart and indicating buying interest at lower levels. About 2,222 shares advanced, 1,803 declined, and 165 were unchanged.
The rally was powered by IT counters as the Nifty IT index surged 4.3 per cent, significantly outperforming the broader market. TCS, Infosys, HCL Technologies and Tech Mahindra emerged as the top Nifty gainers.
"Today's Nifty move due to mainly IT sector," said Mahesh M Ojha of KC Securities. He attributed the buying to rupee depreciation, which is positive for IT, and buzz around global tech companies.
"Current study showing in some cases AI cost is higher from human being so the reason is for buying in IT also many stocks has faced lot of selling pressure suddenly so rebound from lower levels as many Nifty stocks are available at attractive levels," Ojha added.
The Indian rupee edged lower to around Rs 95.1 per dollar, retreating from multi-week highs on Tuesday.
Buying was also visible in PSU banks, auto, metal, consumer durables and realty stocks, with those indices gaining 0.5-1 per cent. Broader markets participated too, with Nifty Midcap 100 up 0.2 per cent and Nifty Smallcap 100 up 0.4 per cent. Market breadth was positive, with 300 stocks from the Nifty 500 universe closing in the green, Shah noted. India VIX declined over 7%, indicating cooling volatility.
On the commodity front, crude oil eased from Monday's highs but stayed elevated amid Middle East tensions. Brent crude futures were at USD 93.53 per barrel, while US West Texas Intermediate traded at USD 90.91 per barrel. The elevated crude levels kept power and oil marketing companies under pressure, though the IT-led bounce helped indices reverse early losses.
"Going ahead, the 23620-23650 zone is expected to act as an important hurdle. A sustained move above 23650 could trigger extension towards 23800. On the downside, 23400-23370 zone is likely to serve as crucial support," he stressed.
— ANI
Reader Comments
Is anyone else worried about the AI cost argument in the article? If AI is actually more expensive than humans, then this IT rally might be short-lived. The market seems to be ignoring macro risks - rupee at 95, crude still high, and FIIs selling. Hope this isn't just a dead cat bounce. 🤔
Finally some green after a rough week. My Infosys holdings are breathing again. But I'm keeping a tight stop loss - this market has been punishing the bulls lately. The 23,400 support held today, which is encouraging for short-term traders.
Impressive bounce from the lows! The IT sector clearly has momentum, but I'm wondering about sustainability. With global tech earnings slowing and the rupee not exactly crashing, this could be a tactical rally. Retail investors should be careful not to get caught in the euphoria.
Good to see midcaps and smallcaps also participating - that's a healthy sign. But let's not forget that the VIX is still elevated. This market requires proper risk management. I'm adding to my HCL Tech position on dips, but keeping some cash aside for the next major correction.
The technical analysis in this article is quite useful - 23,620-23,650 as resistance and 23,400-23,370 as support. I'll be watching those levels closely. IT rally looks genuine, but one session doesn't make a trend. Need confirmation in the next couple of days.
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