Nifty IT outshines, Tech Mahindra gains over 4 per cent; metal stocks sink!

Market Update at 02:20 PM: Indian markets were seen trading near the all-time level with Nifty & Sensex gaining 0.10 per cent and 0.18 per cent, respectively.   

Among the sectoral indices, Nifty IT is seen soaring 2.76 per cent while Nifty PSU Bank and Nifty Metal tumbled 1.89 per cent & 1.71 per cent, respectively.   

Interestingly, all the top four contributors to the benchmark Nifty 50 are from the IT sector with Infosys leading from the front, followed by TCS, Tech Mahindra, and Wipro.

Nifty witnessed a lacklustre start and soon, slipped below the 16,500 mark. However, after registering a low of 16,480.75, it bounced back and traded with positive bias for the majority part of the trading session but within a capped range. At close, it settled at a new lifetime high as well as above the previous day’s high.   

Among the sectoral indices, Nifty Metal and Nifty Energy were the top gainers while on the flip side, Nifty Media and Nifty PSU Bank were the top laggards.   

The broader market indices continue to underperform as Nifty Midcap 100 and Smallcap 100 lost 0.34 per cent and 0.78 per cent, respectively. Interestingly, Nifty Midcap and Nifty Smallcap are nearing their important support as defined by the moving average i.e. 50-DMA.  

On the daily chart of Nifty, it has formed a bullish candle, carrying higher high & higher lows, indicating continuation of buying interest. Technically, the index is maintaining its rhythm of higher high & higher lows, which is positive for the index. Moreover, as it has marked a fresh all-time high on Monday, it is trading above its important short and long-term moving averages.   

Going ahead, the level of 16,480 is likely to act as immediate support; failing to hold above this support could result into an extended profit booking up to the levels of 16,370-16,400. Meanwhile, on the upside, the level of 16,600-16,740 is likely to act a resistance level.   

Traders can adopt buy-on-dips strategy as long as the index trades above the level of 16,480. And they should also keep a close eye on stock-specific action as we believe that the index might consolidate for some time now and stock-specific action would continue.