IT stocks lift Nifty to 23,146 as Tech Mahindra jumps 8.5%; index ends week up 2.8%

Indian shares rose for a second day, and this time the push came almost entirely from software companies. The Nifty 50 closed at 23,146.15, up 148.80 points (0.65%). The Sensex ended at 74,729.27, up 413.66 points (0.56%).

The Nifty IT index jumped about 3.9% after results from Tech Mahindra and Wipro. Most of the rest of the market barely moved.

• Nifty 5023,146.15, +148.80 pts (+0.65%). Second straight gain.
• Sensex74,729.27, +413.66 pts (+0.56%).
• Midcap / SmallcapNifty Midcap 100 −0.11%, Nifty Smallcap 100 −0.01%.
• Breadth2,221 stocks rose, 1,791 fell and 185 were unchanged, per HDFC Sky.

New to the indices? See how the Sensex and Nifty work.

A good week, after a rough start

The Nifty began the week by falling to 22,363.35 on Monday. It then gained on three of the next four days. From last Friday's close of 22,520.45, it is up 625.70 points, or 2.78%, for the week. The Sensex is up 2,256.94 points (3.11%) from 72,472.33 (FIN2DAY calculation).

Thursday's 1,534-point Sensex jump came while Korean and Japanese markets crashed. Our Thursday update explains why. On Friday, Asia recovered: Japan's Topix rose 1.8% and the Hang Seng 1%, according to Kotak Neo.

IT carried the day

Tech Mahindra rose 8.48%, the best performer in the Nifty. Its September-quarter EBIT margin, a measure of operating profit, came in at 14.8%, up 0.4 percentage points from the June quarter and above analyst estimates, Business Today reported. Revenue was $1.693 billion, up 7.2% from a year earlier in constant currency. New deals worth $1.02 billion made it the fourth straight quarter above $1 billion. The board also recommended a 1:1 bonus issue.

Wipro, which is not in the Nifty 50, rose about 6%, per HDFC Sky. Its IT services revenue was flat from the previous quarter at $2.61 billion, and it guided for growth of −1.5% to +0.5% in the December quarter. TCS (+4.89%) and Infosys (+4.61%) rose along with them.

On the losing side, IndiGo owner InterGlobe Aviation fell 1.91% after the Centre said it had finalised airfare pricing rules. BSE Ltd dropped 1.90% after SEBI said expiring derivatives will settle on a VWAP (volume-weighted average price) from the last 30 minutes of trading, dropping a planned closing auction. Kotak Neo said private banks, financial services, FMCG and oil and gas lagged.

Foreigners still selling

The rally is not being led by foreign money. FIIs sold a net ₹10,156.42 crore of Indian shares from Monday to Thursday, including ₹5,285.37 crore on Thursday alone. Domestic institutions bought ₹11,474.09 crore over the same four days (FIN2DAY calculation from NSE provisional data). "The recovery remains selective," PL Capital's Vikram Kasat told Business Standard, naming FII outflows as an overhang.

Rupee and oil

The rupee rose for a sixth straight session. It closed at 94.92 to the dollar (provisional), up 7 paise from 94.99, helped by RBI steps to curb spot dollar demand, PTI reported. Brent crude traded at $105.56 a barrel, down 0.34%. Oil above $100 is still a worry for India, which imports most of its crude. See what $100 oil does to India.

What to watch

• Bank resultsHDFC Bank, ICICI Bank, Axis Bank and Yes Bank are scheduled to report on Saturday, 17 October. Banks make up a large part of the Nifty, so these could set the tone on Monday.
• LevelsLKP Securities' Vatsal Bhuva sees support at 22,800 and resistance at 23,200.
• GlobalUS bond yields and crude prices, after hot US inflation data this week. See how a Fed hike pulls money out of India.

Educational content only, not investment advice.