Now, let’s break down what’s driving this rally. First up, auto stocks. They outperformed significantly, driven by robust December sales data. This is noteworthy considering December usually sees muted demand. Next, we have the IT sector. The IT index, which is the second-largest sector after financials, climbed 2.3%. Analysts from CLSA and Citi have projected further revenue growth for the IT sector in the December quarter and throughout 2025. Major players like Infosys, TCS, HCL Tech, and Tech Mahindra collectively contributed over 360 points to today’s Sensex rally.
Moving on to the economy, Bernstein’s India strategy suggests that the economy has bottomed out. They anticipate growth to pick up in the next one to two quarters. With a 5% growth in September and low industrial growth, they argue this phase could represent a turning point. They recommend investing ahead of this recovery, despite some risks to FY26 earnings. Bernstein has revised its target PE multiple to 19.5 times two-year forward EPS, projecting a year-end Nifty 50 target of 26,500. This indicates a potential return of about 12% for the year.
Next, let’s talk about banking and financial stocks. They rebounded strongly today, with Bajaj Finserv and Bajaj Finance surging nearly 8% and 6.5%, respectively. Other private lenders like HDFC Bank, Kotak Mahindra Bank, and IndusInd Bank also added to the gains.
Lastly, we need to mention today’s trading dynamics. Over the past two weeks, the Nifty has been trading within a defined range of 23,900 on the upside and 23,500 on the downside. Today, we saw a decisive breakout above the upper band of this range, which was evident amid buying on Thursday’s weekly expiry.
To sum it up, the markets are experiencing a robust rally driven by strong performance in the auto and IT sectors, a positive outlook on the economy, and a rebound in banking stocks. Keep an eye on these developments as we move forward. That’s all for today’s episode of ET Market Watch. Thanks for tuning in!
