Discover how TCS led gains as IT stocks outshined in a volatile market session
The Indian stock market witnessed mixed trends during Friday’s trading session, reflecting volatile investor sentiment amid global and domestic pressures. Benchmark indices, the BSE Sensex and the Nifty50, traded nearly flat after marginal gains in the morning session. At noon, the BSE Sensex was up by 97.73 points, or 0.13%, at 77,717.94, while the Nifty50 edged ahead by just 2.15 points, or 0.01%, to 23,528.65.
Sectoral Performance
The IT sector was the sole bright spot, with its index rising by 2%, buoyed by gains in major tech stocks. TCS led the charge, climbing 4.48% on the Sensex and 4.51% on the Nifty50, following robust quarterly results. Other IT majors, including Tech Mahindra, Infosys, and HCLTech, also posted gains.
Conversely, most other sectoral indices registered declines. The Media index suffered the most, falling by 2.32%, followed by the PSU Bank index, which dropped 1.67%. Pharma, Metal, and Auto indices declined by 1.40%, 1.40%, and 1.35%, respectively. The broader Nifty Midcap 100 and Smallcap 100 indices shed 1.77% and 1.36%, reflecting weakness in smaller stocks.
Key Stock Movers
Among the Sensex constituents, TCS emerged as the top performer, followed by Tech Mahindra, Infosys, HCLTech, Bajaj Finserv, Nestle India, and Bajaj Finance. On the downside, NTPC fell 2.98%, while IndusInd Bank, Mahindra & Mahindra, Power Grid Corp., and UltraTech Cement were notable laggards.
The Nifty50 mirrored the same trend, with TCS, Tech Mahindra, and Infosys leading the pack. Shriram Finance experienced the steepest fall, down by 5.19%, accompanied by NTPC, Adani Enterprises, and Hindalco Industries.
Global Market Trends
Global cues added to the uncertainty in Indian markets. Elevated Treasury yields in the U.S. and a significant drop in the British pound amid concerns about the UK’s economic stability weighed on investor sentiment. The yield on the U.S. 10-year Treasury note retreated slightly from an eight-month high, closing at 4.689%, while gilts in the UK hit 16-and-a-half-year highs, reflecting heightened economic concerns.
Asian markets exhibited mixed performance. Japan’s Nikkei 225 declined by 0.66%, while South Korea’s Kospi fell by 0.41%. Hong Kong’s Hang Seng index and China’s CSI 300 gained marginally, up by 0.4% and 0.03%, respectively.
Domestic Market Drivers
Domestic markets faced headwinds from continued selling by foreign institutional investors (FIIs). On Thursday, FIIs net sold equities worth ₹7,170.87 crore, although their impact was countered by domestic institutional investors (DIIs), who purchased shares worth ₹7,639.63 crore.
Inflationary concerns in China added further pressure, with consumer prices remaining flat. Meanwhile, global factors such as the upcoming U.S. jobs data and the Federal Reserve’s policy meeting later in January kept investors on edge.
Corporate and Economic Updates
TCS set the tone for quarterly earnings season with a reported Q3 FY25 net profit of ₹12,380 crore, marking a 5.5% year-on-year growth when adjusted for one-time legal settlements in the previous year. This performance bolstered confidence in the IT sector, lifting its stocks across the board.
The United Nations released its “World Economic Situation and Prospects 2025” report, projecting India’s GDP growth at 6.6% in 2025 and 6.7% in 2026, supported by strong private consumption and investment growth.
Separately, the government sought input from industry associations to improve the business climate for foreign direct investment (FDI), which has been on a downward trajectory over the past three years.
Currency and Commodities
The rupee hit a fresh low of ₹85.94 against the dollar during intraday trading on Thursday before recovering to close at ₹85.86. High hedging activity by foreign investors and robust demand for dollars have kept the rupee under pressure.
In the commodities market, oil prices rose by over 1%, supported by cold weather in the U.S. and Europe driving fuel demand. Brent crude futures settled at $76.92 per barrel, while WTI crude closed at $73.92 per barrel. Gold prices advanced to a four-week high, with spot gold trading at $2,669.38 per ounce.
Fundraising and Mutual Funds
Indian corporates achieved record fundraising in 2024, with public equity raising reaching ₹3.7 trillion, up 159% from the previous year. The mutual fund industry also witnessed strong inflows, with equity MFs recording net inflows of ₹41,156 crore in December, capping a robust ₹3.9 trillion for the calendar year.
Primary Markets and Regulatory Measures
Several IPOs were in focus, including Quadrant Future Tek and Capital Infra Trust. Meanwhile, Sebi introduced measures to curb index derivatives trading frenzy, with two steps—upfront option premium collection and removal of calendar spread treatment—set to take effect from February 10.
Outlook
The Indian stock market remains on a cautious footing, with global and domestic uncertainties continuing to dominate sentiment. As investors await key events, including U.S. jobs data and the Federal Reserve’s meeting, market volatility is expected to persist. The upcoming Budget 2025-26 will also play a critical role in shaping investor confidence.
While challenges such as FII outflows and inflation concerns persist, sectors like IT are showing resilience, providing some optimism amid the turbulence. A balanced investment approach and vigilant monitoring of global cues will be crucial for navigating the current market landscape.
