Indian IT stocks managed to push benchmark indexes higher on Friday, alleviating some of the damage incurred during a challenging week marked by a three-session decline triggered by HDFC Bank’s disappointing results. The NSE Nifty 50 closed 0.75% higher at 21,622.60 points, and the S&P BSE Sensex ended 0.7% up at 71,683.23. However, both indexes recorded weekly losses of 1.24% and 1.22%, respectively.
Earlier in the week, concerns over HDFC Bank’s margins led to a nearly 3% drop in the benchmarks from Tuesday to Thursday. Financial stocks slid 4.1% for the week, contributing to the overall market decline. Ajit Mishra, Senior Vice President for Research at Religare Broking, noted that while banking faced challenges, other sectors remained resilient, suggesting no significant market correction.
Friday saw a rebound in IT companies, with a notable portion of their revenue coming from the United States. Positive U.S. labor data fueled optimism for a soft landing of the economy, complementing the green shoots of demand recovery signaled by IT bellwethers. The IT index closed 0.92% higher for the day and 1.5% for the week, providing some comfort amid banking sector challenges.
Mishra highlighted the buoyancy in IT majors during a period when the banking sector was under pressure. Small-cap and mid-cap indexes, more domestically focused, each rose over 1% on the day. Small-caps experienced a weekly decline of 0.37%, while mid-caps posted a weekly rise of 0.64%.
In terms of individual stocks, UltraTech Cement, owned by the Aditya Birla group, closed 2% higher after surpassing analysts’ expectations for third-quarter profit. Hindustan Unilever ended 0.7% higher ahead of its quarterly results, falling short of analysts’ profit expectations for the quarter. Despite the challenges faced by the banking sector, the overall market sentiment remained cautiously optimistic, with IT stocks playing a significant role in stabilizing the benchmarks amid a challenging week.
