Sensex surges over 800 points: What's driving today's rally?
What's the story
India's benchmark indices, Sensex and Nifty, witnessed a major surge on Friday. The rally was largely driven by strong buying in IT shares after Tata Consultancy Services (TCS) reported better-than-expected quarterly revenue. Earlier in the session, the Sensex rose by 823.09 points or 1.07% to trade at 77,564.91 while the broader Nifty climbed to 24,215.45, up by over 252 points or nearly 1%.
Market impact
TCS's strong performance boosts IT shares
The strong performance of TCS, which saw its shares rise by over 3% in early trade on Friday, has had a major impact on the market. The company's June quarter results and management commentary have bolstered expectations of a gradual demand recovery from Q2 onward. This has prompted brokerages to maintain a broadly positive outlook on the stock, further fueling buying in IT shares.
External factors
Positive movement in Asian markets and decline in volatility index
The positive movement in Asian markets, especially South Korea's Kospi index which jumped over 4%, and Hang Seng index which was up by 2%, also contributed to the market rally. Meanwhile, India's volatility index or fear gage declined by 6% to a level of 12.63, further boosting investor confidence.