IT bump not enough for Indian shares to shrug off HDFC Bank-led weakness

BENGALURU: Indian IT stocks helped the benchmark indexes close higher on Friday, but not by enough to avoid a weekly loss after a three-session losing streak sparked by HDFC Bank’s disappointing results earlier in the week.

The blue-chip index NSE Nifty 50 closed 0.75% higher to 21,622.60 points, while the S&P BSE Sensex ended 0.7% up to 71,683.23. They lost 1.24% and 1.22%, respectively for the week.

The benchmarks tumbled nearly 3% from Tuesday to Thursday, mainly due to HDFC Bank’s slide following worries over its margins. Financial stocks slid 4.1% this week.

“Apart from banking, other sectors are still holding strong. So, I don’t see any reason that the market would witness any major correction,” said Ajit Mishra, senior vice president for research at Religare Broking.

On Friday, IT companies, which earn a significant share of their revenue from the United States, climbed after US labour data bolstered hopes of a soft landing for the economy, adding to the optimism after IT bellwethers flagged green shoots of demand recovery.

The IT index closed 0.92% higher for the day and 1.5% for the week.

“The buoyancy in the IT majors, when banking is on the back foot, seems to be giving some comfort,” Mishra said.