Sensex rallies over 100 points as IT stocks hold fort

As uncertainty over US talks to avoid a debt default cast a shadow over markets, Sensex and Nifty opened in the red zone on Monday morning but swung higher on buying in IT stocks. Sensex went close to the 61,900 mark while Nifty crossed the 18,250-mark.

Most sectoral indices were trading in the green zone with IT stocks leading the upside. LTIMindtree, Mphasis, Infosys, LTTS, Wipro and Tech Mahindra were all up around 1% each, tracking the recent upside seen in Nasdaq.

Balaji Amines crashed around 19% to hit 52-week low at Rs 1,872.90 on Q4 results and the resignation of its CFO.

Within the Nifty pack, Adani Enterprises and Adani Ports rallied 3-4% each.

The last of the Q4 results are expected in the current week. "This could impact the individual stock prices, but the overall mood will be decided by the FPI flows and developments on the US debt default situation," said Deepak Jasani, Head of Retail Research, HDFC Securities.

The undercurrent of the market is bullish. Analysts were expecting Bank Nifty to gain more traction since the Rs 2000 note withdrawal was seen as positive for banks. The banking index was, however, trading close to the flatline.

PNB was the top gainer in the pack while SBI and HDFC Bank were flat.

"The withdrawal of Rs 2,000 note will add to the deposits of banks and increase their CASA thereby boosting their bottom line," said Dr V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.

Global markets
US stocks finished lower Friday, weighed down by worries over the debt-ceiling deadline and concerns that more mergers involving regional banks may be needed. All three major indexes booked weekly gains, with the Dow rising 0.4% to snap two straight weeks of losses.

This morning, Asian stocks and Dow futures were struggling as US debt ceiling negotiations approached crunch time after stalling last week.

MSCI's broadest index of Asia-Pacific shares outside Japan was wobbly and was last up 0.1% for the day. Japan's Nikkei, which on Friday hit its highest since August 1990, was also mostly unchanged while Australia's resources-heavy shares slipped 0.3%. South Korea bucked the sluggish trend, gaining 0.8%.

Both Chinese bluechips and Hong Kong's Hang Seng index were up 0.4%, likely encouraged a little by President Biden's remarks that he expected a thaw in frosty relations with China "very shortly".

Currency Watch
The Indian rupee fell 13 paise to 82.80 against US dollar in early trade. The dollar index, which measures the U.S. currency against six major peers, edged 0.04% lower to 103.00, after reaching 103.63 last week for the first time since March 20.

Crude Impact
Crude oil prices were under pressure as caution around the US debt ceiling talks and concerns about demand recovery in China offset support from lower supplies from Canada and OPEC+ producers. Brent crude futures were trading at $75.10 a barrel.

FII/DII Tracker
On Friday, FIIs turned net sellers by exiting stocks worth Rs 113 crore. DIIs, on the other hand, compensated by buying equities worth over Rs 1,000 crore.

(With inputs from agencies)