IT shares rally on strong earnings outlook from Nvidia

Global IT stocks rose sharply on Friday, fueled by robust earnings and a positive forecast from Nvidia. The Nifty IT Index led sectoral gains with a 3.51% increase, marking its best performance in two months.

The combined market value of the top 10 IT firms increased by Rs 85,026 crore. Major IT companies also recorded notable gains: TCS rose 4.16%, Infosys increased 2.99%, HCL Technologies advanced 2.66%, and Wipro went up 2.58%.

Market insights and expert commentary

Vinod Nair, Head of Research at Geojit Investments, highlighted that the IT sector’s strong performance followed Nvidia’s impressive results and optimistic outlook. This boosted confidence in ongoing AI investments and is expected to benefit companies engaged in enterprise AI deployment and workflow integration.

The Sensex climbed 330.92 points (0.43%) to finish at 77,624.51, while the Nifty gained 84.80 points (0.35%) to close at 24,175.65. Market breadth was positive with 2,385 stocks advancing compared to 1,932 declining on the BSE. The BSE Midcap and Smallcap indices increased by 0.23% and 0.44%, respectively.

Ankur Punj, Managing Director of Equirus Wealth, noted that the market settled higher following volatile trading the previous day. Gains in IT shares and strengthened banking stocks supported the rally. Additionally, an overnight surge in the Nasdaq index helped boost Indian IT stocks, which had been rangebound in recent sessions.

Broader market activity and sector performance

In terms of foreign and domestic flows, foreign portfolio investors sold shares worth Rs 5,039.80 crore, while domestic institutional investors purchased shares valued at Rs 5,183.93 crore, according to provisional exchange data.

Beyond IT, sectors such as metals, healthcare, and pharmaceuticals led gains, whereas consumer durables and FMCG sectors experienced losses.

Investor wealth increased by Rs 1.28 lakh crore, raising the BSE’s total market capitalization to Rs 492.82 lakh crore.

Weekly data shows that the Sensex and Nifty declined by 0.36% and 0.31%, respectively, marking the third consecutive week of declines—the longest span in five months. In contrast, the BSE Midcap and Smallcap indices recorded weekly gains of 0.50% and 0.59%, respectively.

Looking ahead, investors will monitor comments from the Federal Reserve Chair, US employment data, business sentiment reports, and domestic GDP figures. These will be key to understanding growth prospects and the trajectory of global interest rates, according to Vinod Nair.

Key Takeaways

  • IT stocks surged following strong earnings and positive Nvidia forecast.
  • Nifty IT Index posted its best performance in two months with a 3.51% gain.
  • Major IT companies including TCS, Infosys, HCL Technologies, and Wipro recorded significant gains.
  • Broader markets saw mixed sector performances with metals, healthcare, and pharmaceuticals advancing.
  • Investors await key economic indicators to assess future market direction.