Sensex, Nifty gain as IT stocks gain amid US elections; Titan tumbles 3%

The BSE Sensex was up 251.87 points to 79,728.50 points at 10:31 am, while the NSE Nifty rose 74,20 points to trade at 24,287.50.

In Short

• Sensex, Nifty surge in early trade as IT stocks gain
• IT stocks surge on upbeat US economy and services data
• Brokerage Jefferies sees Donald Trump’s tax plan benefiting Indian IT demand

Benchmark stock market indices opened strong on Wednesday, driven by gains in IT stocks amid close monitoring of US election results.

The BSE Sensex was up 251.87 points to 79,728.50 points at 10:31 am, while the NSE Nifty rose 74,20 points to trade at 24,287.50.

In early trade, the gains were seen across all 13 major sectors, with the IT index leading, gaining around 3%.

The IT sector rallied on positive signals from the US. economy, specifically the unexpected acceleration in services activity, as Indian IT firms rely heavily on the US market for revenue.

Analysts from Jefferies, led by Mahesh Nandurkar, noted that potential corporate tax cuts under a Trump presidency could further support demand for Indian IT services.

Among Indian stocks, Titan fell by 3% following a drop in Q2 profits, partly due to inventory losses from the gold import tax cut. Dr. Reddy's rose 2.1% with brokerages optimistic about its growth outlook, driven by strong volume growth and a diverse product portfolio. GAIL gained around 6%, benefiting from strong natural gas marketing that helped it surpass profit expectations for Q2.

Commenting on the market trend, Dr. V K Vijayakumar of Geojit Financial Services emphasized that while the rebound indicates strength, headwinds such as Q2's weak earnings growth and FY25 downgrades could limit a broad rally.

"The sharp rebound in the market yesterday indicates a halt to the downward trend witnessed during the last many days. The fact that the rebound is being led by fairly-valued and fundamentally strong large banking stocks is important and points to the possibility of the continuation of the trend. However, the poor earnings growth in Q2 and earnings downgrades for FY 25 are headwinds that will constrain a sustained rally,” Vijayakumar said.

“What is likely is stock-specific action in response to results, guidance and expectations. Investors can utilise the market rallies to move from high-priced mid and smallcaps to the safety of largecaps,” he added.

Moreover, he noted that the noise and action related to the US elections will last only for a few days, after which economic fundamentals will determine the direction of the market trend."