Sensex rises 110 points as TCS soars 12%
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Earnings were back in focus Tuesday as investors reacted positively to TCS Q4 that were announced after market hours yesterday. TCS, India's biggest software services exporter, soared 12.2%, rising Rs 129.95 to Rs 1,194.20 on the Nifty index.
It was also the top Nifty gainer and contributed nearly 100 index points to the Sensex. The BSE IT index jumped 5% as TCS' outperformance spilled across to other IT stocks. Wipro (4.2%), which reports earnings tomorrow and HCL Tech (3%), which reported higher than expected profits last week - were among the top Nifty gainers. Infosys (1.7%) shares also gained.
IT stocks have been under pressure since Infosys said it expected 8-10% dollar revenue growth for FY13. However, TCS said it will beat the higher end of IT lobby Nasscom's revenue guidance of 14%.
The resurgence in IT stocks meant that markets were able to rebound from the loss making session yesterday. The BSE Sensex gained 110.61 points or 0.65% to 17,207 while the broader Nifty index advanced 22 points to 5,222.
However, the Nifty hit the 5,180 mark in intraday trade today, which analysts said was a bearish indication.
"If the Nifty breaks below 5,183 - the immediate swing lows - then it would violate the pattern and in that case 5,342 would be marked as a failure to breakout. All long bets would be off from the table once that happens even in intraday trade," independent analyst Sarvendra Srivastava said.
Most other sectoral indices closed flat to negative. Telecom stocks were under selling pressure for a second straight day though they managed to close off the day's low. Bharti (-1.65%), India's biggest wireless firm, Anil Ambani promoted RCom (-1.4%) and Aditya Birla group firm Idea (-4.2%) declined on the back of Trai's new recommendations for auctioning of spectrum. These incumbents would have to invest huge amounts for extra spectrum and for shifting from 900 MHz to 1800 MHz band.
On the Nifty, 26 of the 50 stocks closed with gains. Government owned Steel Authority of India (SAIL), private power producer Tata Power and two-wheeler major Hero MotoCorp gained 2-4%. Cement majors Ambuja (-4.6%) and ACC (-2.4%) and engineering and construction major L&T (-2.8%) were at the bottom of the Nifty index.
The market breadth turned negative by the closing bell, indicating weakness in the broader markets.
Global stocks were mostly positive when Indian markets closed. Asian stocks closed off the day's low while markets in Europe traded higher after the sharp cuts yesterday.