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TCS, Infy, HDFC help Sensex, Nifty end higher after three losing sessions

Stock prices have been under pressure due to a global rout and the Rs 114 billion fraud in the Indian banking sector

Pavan Burugula  |  Mumbai 

bse, sensex
A road sign is seen next to Bombay Stock Exchange (BSE) building in Mumbai, India | Photo: Reuters

The performance of three index heavyweights, (TCS), and HDFC, has averted a double-digit drop in this year, contributing 530 points to the Sensex. On the other hand, 21 declining stocks pulled the index down by 982 points.

The was largely unchanged on a year-to-date basis. However, the index came off by nearly 7 per cent from its peak 36,283 in January. Technology majors and were up about 11 per cent each this year, while mortgage lender gained about 7 per cent.

State-owned was the biggest gainer this year, but it does not have much weight in the index due to its high government shareholding.

Analysis of stock-wise index contributions showed the Sensex would have been down 10 per cent from its January peak had TCS, and counters remained flat.

TCS, Infy, HDFC help Sensex, Nifty end higher after three losing sessions


have been under pressure this month due to a global rout and the Rs 114 billion fraud in the Indian banking sector.

Most global bounced back in the past one week. India missed the global rebound on account of weak domestic cues. Market players said investor sentiment had turned sombre because of the (PNB) fraud, widening of the current account deficit and warning by global index provider MSCI.

Banking stocks, particularly those of public sector undertakings, saw sharp declines in recent trading sessions.

“The current phase of correction in the is on account of domestic factors such as the India might underperform in the near term, as 2018 will be a year of several domestic events. However, our fundamentals continue to look good and our will perform well from a long-term perspective,” said Gaurang Shah, head investment strategist, Geojit Financial Services.

TCS, Infy, HDFC help Sensex, Nifty end higher after three losing sessions


Interestingly, the biggest index laggards this year were the same stocks that were among the top performing ones in 2017. For instance, Bharti Airtel has lost 20.2 per cent in 2018 — the steepest fall among index stocks. In 2017, Airtel was one of the top index performers, with its shares gaining 70 per cent. Similarly, Maruti Suzuki soared 81 per cent in 2017 but lost 10 per cent this year. (SBI) shares fell about 12 per cent in 2018 because of the ripple effect caused by the Together, these three pulled the Sensex down by 412 points.

A sharp rebound in technology stocks was one of the surprising themes this year. The IT stocks remained under selling pressure throughout 2017 on concerns about stricter US visa norms and muted sales. Analysts said things had started to look better for the sector as order sales from non-banking firms and artificial intelligence saw an uptick. IT stocks were heavily beaten down in 2017 and investors found good buying opportunities.

Not only Infosys and TCS, smaller IT firms such as Tech Mahindra and HCL also made stellar gains this year. Analysts said there was a lot of interest in IT stocks from both the domestic and foreign institutions as they were available at attractive valuations.

First Published: Wed, February 21 2018. 20:56 IST
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