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Sunday, October 24, 2021

Festive mood: Sensex flies past 61,000 on earnings optimism

The IT sector remained under pressure at the beginning of the week following a weak start to the earnings season, but regained momentum as most sector majors reported better-than-expected earnings.

By: ENS Economic Bureau | Mumbai |
Updated: October 15, 2021 12:29:00 am
TCS, HCL Tech, Bajaj Finance and Asian Paints were among the laggards today.

The Sensex on Thursday soared 569 points, or 0.94 per cent, to close above the 61,000 mark amid favourable inflation data and bullish fervour in IT stocks, following strong earning scorecards by sector majors. The Sensex shot up to a new peak of 61,305.95 and the NSE Nifty Index gained 177 points, or 0.97 per cent, to 18,338.55.

The domestic market was in an upbeat mood during the week led by strong buying in the auto, metal, energy and banking sectors. The auto sector outperformed other sectoral indices on expectation of demand revival during the festive season and banking stocks followed the trend owing to strong business preview numbers and favourable credit growth data ahead of earnings season, said Vinod Nair, head of research at Geojit Financial Services.

The IT sector remained under pressure at the beginning of the week following a weak start to the earnings season, but regained momentum as most sector majors reported better-than-expected earnings. September retail inflation fell sharply to 4.35 per cent against 5.30 per cent in August, owing to a decline in food price while wholesale inflation also eased to 10.66 per cent compared to 11.39 per cent in the previous month.

Global markets were under pressure as inflation due to rising commodity prices and the upcoming earnings season compelled investors to trade cautiously. Inflationary pressure continued in the US, as retail inflation remained above the 5 per cent level for the fifth consecutive month. Banking will be the key sector under focus in the coming days as the sector is set to kickstart its earnings season.

“With the expectation of a strong recovery in corporate earnings, the Indian market is positioned to continue its bull run. However, any deviation from market expectation may lead to short-term correction in the respective segments,” said an analyst.

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