Sensex, Nifty record highs, why are stock markets rising today: Indian equity benchmark indices, BSE Sensex, and NSE Nifty50, hit new record highs on Friday, July 12, 2024. This comes after the stock market indices rallied over 1 per cent in the intraday trade.
The BSE Sensex, for instance, soared 996 points, or 1.2 per cent, to hit an all-time high of 80,893.5. The NSE Nifty50, on the other hand, neared the 24,600-mark as it hit a record high of 24,592 on July 12.
By close, the BSE Sensex stood at 80,519, up 622 points, and the Nifty50 shut shop at 24,502, up 196 points.
Both the benchmarks advanced up to 0.77 per cent as against a 0.22 per cent dip the BSE MidCap and 0.13 per cent in the BSE SmallCap.
So, why are stock markets rising today, July 12?
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Rally in IT stocks
A large part of Friday's rally in the benchmarks was led by information technology (IT) stocks. Share price of Tata Consultancy Services (TCS), which was the first major IT firm to report its June quarter (Q1) results for financial year 2024-25 (FY25) on Thursday, advanced 7 per cent to hit an intraday high Rs 4,199 per share before closing 6.6 per cent higher.
The rally in TCS share price came as investors cheered better-than-expected earnings growth, net addition in workforce by over 5,000, and a surprise margin expansion.
According to analysts at Jefferies, key positives from the results were the return to growth of BFSI and Hitech vertical as well as North America region - which analysts see as signs of improvement in the margins. With manufacturing and life Sciences continuing to grow as well. READ MORE
Thus, taking cues from TCS, other IT stocks surged in trades on Friday on hopes of demand revival. Tech Mahindra, Infosys, and HCL Tech share prices gained over 4 per cent intraday, eventually settling up to 3.57 per cent higher. HCL Tech will release its Q1 FY25 results today, Infosys on July 18, and Wipro on July 19. READ MORE
Large-caps on a roll
Apart from IT stocks, other heavyweights were also driving the stock markets higher. Share price of Axis Bank advanced over 2.5 per cent intraday but ended 1.6 per cnt up. RIL, JSW Steel, Bajaj twins, Ultratech Cement, L&T, HUL, SBI, and HDFC Bank closed 0.3 per cent to 1 per cent higher.
Easing bond yields on rate cut hopes
Yields on 10-year India Government Bond fell to 6.972 per cent intraday from Thursday's closing level of 6.982 per cent. Overnight, yields on the 10-year US Treasury bonds fell 7.4 basis points at 4.205 per cent. The 2-year Treasury yield pulled back 11.9 basis points to 4.511 per cent.
The ease in bond yields comes after the June consumer price index slid 0.1 per cent in the US from the prior month to 3 per cent, or its lowest level in more than three years. Wall Street is hoping an improvement in inflation will mean the Fed can start to ease monetary policy as soon as this fall.
Meanwhile, India's retail (CPI) inflation data for June will be released later today.
Technical levels
According to Deven Mehata, research analyst at Choice Broking, the Nifty index has support at 24,300, followed by 24,200 and 24,150. On the higher side, 24,400 can be an immediate resistance, followed by 24,450 and 24,500.
" Friday's session could be volatile where traders are advised to book profits near the resistance of 24,400-24,450 levels and should enter long positions on dips near the support level of 24,300-24,250 levels with a strict stop loss of 24,200 on closing basis," he said.