IT index up 4.2% in a week as large caps join the rally

A significant trend in the market is the strength in IT index which is up 4.2 per cent in a week, says V.K. Vijayakumar, Chief Investment Strategist at Geojit Financial Services.

Mid-cap IT has been doing well and now large-caps like HCL Tech, Infosys and Wipro have joined the rally. The order pipeline of IT companies is expected to improve on the back of the expected soft landing of the US economy, he said.

Metal stocks also are firming up on expectations of rebound in China following the stimulus. Measures announced to revive the Chinese property market. But there is no room for too much optimism here since the Chinese property market is in deep trouble and recovery would be difficult, he said.

Brent crude at $89 and the poor monsoon are areas of concern. Good inflows into mutual funds is reflected in the strong buying by DIIs who have been buyers for Rs 4,900 crore in the last two trading sessions, he added.

Nifty extended the gains further to end above the 19,500 zone with improving bias moving. Past the resistance barrier of 19,450 levels and further with one more important hurdle. Of 19,600 zone, if breached decisively, can bring conviction for further movement of the index. To re-test the 20,000 landmark, says Vaishali Parekh, Vice President – Technical Research, Prabhudas Lilladher.

The overall participation from the broader markets is also quite significant. To support the benchmark index to maintain a positive approach from here on for further gains. The support for the day is seen at 19,400 levels while the resistance is seen at 19,700 levels, Parekh said.

BSE Sensex is up 132 points at 65,761 points on Tuesday morning. Titan is up over 1 per cent. NTPC, Tata Steel are down 1 per cent.

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