Nifty IT Rally A Temporary 'Catch-Up Trade', Say Analysts
Indian benchmarks rebounded on Friday, driven by a surge in IT stocks after TCS reported better-than-expected earnings for the quarter-ended June.
India’s information technology stocks on the NSE Nifty are experiencing a “catch-up rally” following a resurgence in the Nasdaq, Aditya Arora, founder and multi-asset research analyst at Adlytick.in, said.
Even as Arora sees potential for further gains, he’s sceptical. “However, I do not foresee a stellar rally, viewing it more as a temporary catch-up trade,” he told NDTV Profit.
“At this point in time, the risk-to-reward ratio is good,” he said. “Investors can consider going long on Nifty IT stocks, as the current scenario appears favourable.”
Gurmeet Chadha, managing partner and CIO at Complete Circle Pvt., concurred, adding that the catch-up rally may end in a day or two.
Indian benchmarks rebounded sharply on Friday after a two-day decline, driven by a surge in IT stocks after industry leader Tata Consultancy Services Ltd. reported better-than-expected earnings for the quarter-ended June.
The NSE Nifty 50 closed 0.77% higher at 24,502.15 and the S&P BSE Sensex ended 0.78% up at 80,519.34. On a weekly basis, the benchmarks have recorded the best stretch of gains in seven months.
During the day, the Nifty rose as much as 1.14% to an all-time high of 24,592.20, while the Sensex jumped 1.25% to a record high of 80,893.51.
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