Markets defy geopolitical jitters; IT stocks power Sensex, Nifty higher

Indian equity benchmarks were trading higher on Monday led by gains in the heavyweight IT stocks including TCS, Tech Mahindra and HCL Tech

Despite the geopolitical tensions amid escalation in the Israel-Iran conflict and rising crude oil prices, Indian equity benchmarks, Sensex and Nifty50, were trading higher on Monday led by gains in the heavyweight IT stocks. From the BSE 30-share Sensex constituents, IT majors TCS, Tech Mahindra and HCL Tech were the top gainers up by over 1 per cent each. 

 

The BSE Sensex was trading at 81,727.30 levels, up by 608.7 or 0.75 per cent, and Nifty 50 was up by 199 points or 0.8 per cent at 24,917.4 levels.  Last check, the Nifty IT index was up by over 1.2 per cent outperforming the Nifty50.  Read Stock Market Updates Today LIVE

 

 

TCS shares rose nearly 2 per cent to hit an intraday high of ₹3,508 after the company announced a strategic partnership with Denmark's largest retailer, Salling Group to drive sustainability, technology innovations and improve organisational efficiency. The collaboration will cover Salling Group's 2,100 stores, brands, and 68,000 employees across Denmark, Poland, Germany, Estonia, Lithuania and Latvia.

 

Among other sectors, barring PSU Banks, all sectoral indices on the NSE were trading higher. The Nifty Metal rose over 0.5 per cent, followed by Auto, Bank, Energy, FMCG, Realty and Oil & Gas.

 

According to VK Vijayakumar, chief investment strategist at Geojit Investments, the uncertainty stemming from the Israel-Iran conflict has created a risk-off in global markets. The safe-haven buying is keeping gold firm but the dollar continues to be weak. 

 

"Interestingly there is no panic in equity markets. Markets will be severely impacted only if Iran closes the Strait of Hormuz triggering a huge spike in crude. This appears to be a low-probability event now," he said. 

 

On the other hand, the broader market indices were underperforming the benchmarks. Last checked, the Nifty Midcap 100 and Smallcap 100 were trading marginally higher, up by 0.2 per cent and 0.06 per cent, respectively. 

 

Vijayakumar added that from the past experience, the times of uncertainty and risk-off are buying opportunities for long-term investors. The difference this time is that the risk-off has not triggered big selling in equities making their valuations attractive. 

 

"The market scenario characterised by sustained retail buying and fund flows into mutual funds will ensure valuations remaining high for an extended period of time. Therefore, long-term investors can use this risk-off scenario to buy relatively attractively valued stocks like financials," he added.

 

From a technical perspective, Akshay Chinchalkar, head of research at Axis Securities highlighted that 24,462 remains a critical support level that bulls have to defend - and even with Friday's early session drop, this level held. 

 

"More importantly, the rebound led to the formation of a bullish "belt hold line" which is the same bullish pattern that caught the early April lows. The battle lines are clear - bulls need to keep 24,462 intact and give us a daily close above 24,826, while bears need to protect this resistance level to have any chance of pushing the market lower," he added.