Weekly Wrap: Sensex, Nifty post strong recovery led by IT shares

In last tring session of week, Indian stock markets witnessed a significant rebound, overcoming negative sentiment that prevailed during Independence Day week. Bombay Stock Exchange's 30-share Sensitive Index (Sensex) surged by 1,331 points, or 1.68 per cent, to close at 80,436.84, while National Stock Exchange's broer Nifty 50 index climbed 397.40 points, or 1.65 per cent, to settle at 24,541.15 on Friday.

rally was driven primarily by information technology (IT) companies, with none of Sensex stocks ending in red. On Nifty 50, only three stocks—Divi’s Lab, Dr. Reddy’s, and SBI Life—posted minor losses, closing session slightly lower.

Among top gainers on NSE were Wipro, Tech Mahindra, Grasim, Mahindra & Mahindra, Tata Motors, Shriram Finance, and UltraTech Cement. Wipro and Tech Mahindra emerged as biggest winners of day, with Wipro surging by 4.31 per cent and Tech Mahindra by 4 per cent.

“Despite experiencing volatility throughout holiday-shortened week, markets ultimately finished with strong gains. week started on a subdued note, influenced by mixed signals and midweek pressure on select heavyweight stocks, which turned sentiment negative. However, a sharp recovery on Friday reversed this trend, enabling benchmark indices to close near ir weekly highs,” said Ajit Mishra, SVP research at Religare Broking.

Sector-wise, IT stocks led charge, followed by realty and auto, while energy and metal sectors ended in red. broer indices also managed to recover, with midcap index gaining nearly a percent and smallcap index finishing almost flat.

With earnings season concluded, focus now shifts to global market cues, particularly after notable recovery in US markets, which has alleviated recession fears. Domestically, investors will be closely monitoring institutional flows and upcoming economic data, such as HSBC India Manufacturing PMI and HSBC India Services PMI, for furr direction.

“ Nifty index has broken out of its consolidation phase, reclaiming its short-term moving average, 20-day EMA, buoyed by sharp rebound in global indices. It now appears poised to fill gap around 24,700 before potentially moving towards its record high of 25,078. In case of a dip, 24,300-24,400 zone is expected to provide immediate support, with major support at 24,000, near 50-day EMA,” Mishra said.

Given selective participation in market, experts suggest focusing on stock selection, with a preference for IT, FMCG, and select private banking majors, while remaining selective in or sectors, he ded.