Nifty50: 19,189 ▲ 216 (+1.1%)
Sensex: 64,718 ▲ 803 (+1.2%)
Namaste, friends!
How much would you pay for a bag that can’t hold anything? Recently, a miniature bag that is smaller than a grain of salt sold for $63,000 (₹51 lakh) at an auction. It is a miniature version of a designer bag that sells $3,100. The bag is so small that it needs a microscope to see it clearly! That is definitely something you need to take with a grain of salt. Thankfully, you won’t need a microscope to see that the markets are rallying to dizzying heights. More on that later.
- Markets rise to new highs supported by gains in IT stocks
- In all, 40 of the Nifty50 stocks closed in the green
- Eurozone inflation eased to a 17-month low of 5.5% in June 2023
Among the Nifty sectoral indices, IT (+2.5%) and Auto (+2.0%) were the top gainers, while Metal (-0.03%) closed flat.
| Top gainers | Today's change |
| M&M | 1,456 ▲ 61 (+4.3%) |
| Infosys | 1,337 ▲ 44 (+3.4%) |
| IndusInd Bank | 1,376 ▲ 42 (+3.1%) |
| Top losers | Today's change |
| Adani Ports | 739 ▼ 16 (-2.1%) |
| HDFC Life | 648 ▼ 3.4 (-0.5%) |
| Apollo Hospitals | 5,099 ▼ 27 (-0.5%) |
What’s trending
⭐ M&M rises after getting PLI certificate
Utility-vehicle maker Mahindra and Mahindra Ltd (M&M) shares gained over 4% to a 52-week high of ₹1,461 intraday. This comes after the company received an eligibility certificate under the production-linked incentive (PLI) scheme for automobiles. This will enable the company to avail subsidies from the government under the ₹25,938-crore PLI scheme, aimed at boosting domestic production, job creation, and driving economic growth.
⭐ AMC stocks surge after SEBI decision
Shares of asset management companies (AMCs) such as UTI AMC, HDFC AMC, and Nippon Life AM jumped in the range of 8% to 14% on Friday. This came after the market regulator SEBI’s decision to defer the overhauling of TER (Total Expense Ratio) regulations. The SEBI said that it would come with another consultation paper on this issue. TER is the expense that mutual fund (MF) schemes can charge from the investors for the management of funds.
⭐ BEL gains on order win
Defence PSU Bharat Electronics Ltd (BEL) has won new orders worth ₹2,191 crore for supply of various defence equipment. These orders are in addition to orders worth ₹5,900 crore it has already received this year. With this, the company has received orders to the tune of ₹8,091 crore so far in FY24. Shares of the company rose 3.7% today.
⭐ IPOs set markets abuzz
Markets are buzzing with new IPOs. The ₹567 crore public issue of drone manufacturer IdeaForge received huge response from investors. The IPO was subscribed 106 times overall on its last day. Meanwhile, the ₹592 crore Cyient DLM IPO was subscribed over 67 times on Day 3. In contrast, the maiden issue of construction and hospitality firm PKH Ventures received only 6% subscription on the first day. You can apply for this IPO here.
In Focus
IT stocks get a boost
Shares of leading IT services companies, including TCS, Infosys, Wipro and HCL Tech rose in the range of 1% to 3.4%. As a result, the Nifty IT index was up 2.5%. What are the key factors behind this rally? Let’s take a look.
Large deals make comeback
In June 2023, top-tier IT companies bagged multiple large deals. For instance, TCS entered into a multi-year deal with UK’s National Employment Savings Trust (NEST) worth $1.9 billion and Infosys announced a 5-year deal with Danske Bank worth $454 million.
As per experts, large cost-optimisation deals, which were missing so far in 2023, are gradually returning for Indian IT companies. In recent months, recessionary fears have eased in the global markets, which may have prompted companies to increase their IT spendings. Large deals ensure long-term revenue visibility for IT companies.
Optimism surrounding Q1 results
In addition, this rally comes ahead of the Q1FY24 results of IT companies, which are likely to be announced soon in July. Last week, global IT giant Accenture announced its results for the quarter ending 31 May 2023, with revenue growth of 5% YoY to $16.6 billion in constant currency terms. Accenture results are seen as a lead indicator for the performance of Indian IT firms.
So far in 2023, IT giants have not participated much in the overall market rally, which saw Nifty50 crossing the 19,000 mark for the first time. In fact, the Nifty IT index has risen only 3.2% compared to nearly 6% rise in the Nifty50. Hence, today’s rally will give some respite to investors. Having said that, Q1 earnings hold a key to the near-term prospects of IT stocks.
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