Sensex surges 800 points, Nifty nears 24,300; IT stocks lead rally

Indian equity benchmarks staged a sharp rally on Friday, with the Sensex surging over 800 points and the Nifty approaching the 24,300 mark. The rally was broad-based, but IT stocks emerged as the primary drivers, pushing the indices into positive territory early in the session.

IT stocks power the rally

The information technology sector led the charge, with major players like Tech Mahindra, Infosys, and TCS witnessing strong buying interest. Tech Mahindra was among the top gainers in the Nifty 50 pack, rising over 3% in early trade.

Analysts attributed the buying spree to renewed optimism around global demand for IT services and a softer-than-expected inflation print in key export markets. The Nifty IT index jumped nearly 2.5% in the first hour of trading.

Jio Financial earnings boost sentiment

Adding to the positive mood, Jio Financial Services reported robust quarterly earnings after market hours on Thursday. The company's numbers beat street estimates on revenue and profit fronts, triggering fresh buying in the stock. Jio Financial shares gained nearly 4% on Friday.

The earnings report provided a much-needed boost to the financial services sector, which had been under pressure in recent weeks due to margin concerns. Banking stocks also edged higher, with HDFC Bank and ICICI Bank contributing to the Sensex gains.

Market recovers from flat close

The rally marks a sharp reversal from Thursday's session, when the Sensex and Nifty closed flat amid geopolitical uncertainties and fluctuating oil prices. Traders said the market had been consolidating for the past few sessions, and Friday's breakout was driven by a combination of domestic and global factors.

Foreign portfolio investors turned net buyers in early trade, adding to the positive momentum. The rupee also strengthened marginally against the US dollar, trading near 83.50 levels.

Broader market participation

The broader market mirrored the gains, with the BSE Midcap and Smallcap indices rising over 1% each. Market breadth was positive, with more than two stocks advancing for every one declining on the BSE.

Auto and metal stocks also saw selective buying, though the IT and financial sectors remained the primary drivers. The Nifty 50 was trading at 24,280 levels, just 20 points shy of the 24,300 mark, with analysts expecting a test of the resistance level in the coming sessions.

Traders will watch for any triggers from global markets, particularly US Federal Reserve commentary on interest rates, as well as the progress of the monsoon session of Parliament. The next major domestic cue will be the release of industrial production data due next week.