Sensex tests 58k, Nifty holds 17,000; IT stocks shine; Campus Activewear drops 6%

Domestic equity markets opened with mild gains on Friday, before the buying interest fizzled out soon, thanks to weakness in the Asian markets. Selling pressure in the select heavyweight pockets of the markets weighed on the traders' sentiments.

At 9.20 am, the 30-share pack BSE Sensex was trading 96.27 points, or 0.17 per cent, higher at 58,021.55, whereas NSE's Nifty50 added about 11 points, or 0.06 per cent, to 17,087.85. However, they gave up early gains and dropped into negative territory.

The broader market performed mixed as the BSE midcap index was in the red, whereas the BSE smallcap index was slightly higher. Fear gauge India VIX eased slightly to 14.43-mark.

Nifty50 is likely to find support at around 17,000, while 17,350 is likely to act as resistance. Bank Nifty is likely to find support at around 39,300 and 40,400 is likely to act as resistance on the upside, said IIFL Securities. "Nifty PCR stood at 0.86 times compared to 0.91 times, while FII’s index future long short ratio stood at 0.08 times against 0.09 times," it said.

Financial stocks including mutual fund players and Insurers were under pressure as the long-term capital gains benefits in debt mutual funds are set to go. However, large-cap Indian IT stocks were trading firm as analysts preferred the blue-chip large-cap IT stocks over smaller peers.

On a sectoral front, Nifty IT index topped among the gainers, rising more than one per cent. Nifty Pharma, Auto and FMCH indices were also trading in green. On the downside, Nifty Bank and Financial Services index were trading with decent cuts. Nifty Realty, Metal and Media indices also weighed on the sentiments.

In the Nifty Pack, all IT blue-chip stocks led the rally. Infosys, Wipro, TCS, Tech Mahindra and HCL Technologies jumped more than a per cent. Adani Ports and Adani Enterprises were trading with decent gains. Among the losers, SBI Life Insurance and HDFC Life Insurance dropped over 2 per cent, followed by a similar fall in Bajaj Finserv and Bajaj Finance.

The steady decline in bond yields, across tenors, in the US reflects the market perception that interest rates are near peaks. The Fed is likely to pause, after perhaps one more 25 bp rate hike, and if the disinflation trend continues on expected lines, the FOMC may cut rates by the end of 2023 or early 2024, said VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services.

"A lot will depend on the extent of the slowdown in the US economy. If a hard landing of the US economy is avoided, equity markets will bounce back. The ongoing stress in the US banking system is a short-term challenge, but a long-term opportunity for equity investors," he said.

In the broader markets, Sundaram Clayton plunged more than 14 per cent. Campus Activewear tumbled about 6 per cent over the bulk deal buzz. Puravankara and Ajanta Pharma dropped about 5 per cent, each, during the early trade.

On the other hand, TTK Healthcare jumped more than 13 per cent, ITI jumped about 7 per cent. Aarti Drugs gained more than 6 per cent. Adani Groups stocks including, Adani Green Energy, Adani Transmission and Adani Total Gas hit an upper circuit of 5 per cent, each.

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