IT Stocks Help Sensex Touch Record Highs

IT Stocks Help Sensex Touch Record Highs

Sensex managed to make record highs this week and touched its all-time high at 34,963.69 on Monday, i.e. January 15 It has been an extremely bullish two-week period for the equity markets globally, with Dow Jones Industrial Average (DJIA) index inching up by more than 4 per cent and S&P 500 index following suit. It was a not a relatively great period for the global technology giants as indicated by Nasdaq, which slipped by more than 2 per cent even as most of the other global indices managed to close in the green. Hang Seng was the only other global index which managed to beat the DJIA index in the past two-week period. Hang Seng was up by 4.99 per cent. 

The European indices closed in the greenwith the CAC 40 leading the way, up by 3.85 per cent, followed by DAX which was up by 2.42 per cent and FTSE which was up 1.18 per cent. Japanese indices, in line with the global indices, inched up by 3.82 per cent. 

The major Indian benchmark indices underperformed their global peers marginally in the past two weeks, with Sensex and Nifty gaining by 3.05 per cent and 2.93 per cent, respectively. The Small-cap index managed to outperform both the key benchmark indices for the period under consideration, thus continuing its dream run in 2018. BSE Small-cap index was up by 3.98 per cent. 

On the sectoral front. the previous two weeks belonged to metal, realty and IT sectors. The Metal index was up by 6.86 per cent, followed by the Realty index, which was up 5.68 per cent and the IT sector index, which gained 3.80 per cent. Bankex was not amongst the leaders even as the index gained 2.87 per cent. The FMCG index was up by 1.33 per cent and the Power index remained flat, but managed to close in the green by 0.64 per cent. The auto companies saw some profit-booking in the past couple of weeks, which pulled the index down by nearly 1.10 per cent even when all the other sectoral indices closed in the green. The Mid-cap index gained 1.64 per cent Institutional investors were net buyers in the market with FII buying into the Indian markets to the tune of Rs 480.29 crore and DIIs buying stocks worth Rs 2573.70 crore. 

The markets will be keenly watching the Budget as it is will set the tone for the markets. Globally, the equity rally does not seem to have paused and there are no signs of panic yet in the markets in spite of high equity valuations.

The past couple of weeks also saw couple of IPOs garnering funds from investors, viz., Apollo Micro Systems and New Generation Power. Both the IPOs received good investor response. While small-caps continue to surprise with the price gains, the large-cap IT companies such as TCS and Infosys have helped push up the key benchmark indices.