IT sector stands out in challenging week for Indian equities

New Delhi, Jan 11 (IANS) The first week of 2025 has been challenging for Indian equities, with broad-based selling dominating sentiment. Amid this weakness, the Nifty IT index stood out with a modest 1.6 per cent gain, supported by strong results and robust commentary from TCS about a demand revival in North America.

IT’s outperformance highlights the importance of sectoral resilience, even during periods of market-wide selling pressure, said Krishna Appala from Capitalmind Research.

The IT sector closed in the green after a gain of 3.44 per cent on Friday.

Sensex ended at 77,378.91, down by 241.30 points, or 0.31 per cent, and Nifty settled at 23,431.50, down by 95 points or 0.40 per cent.

In the week, the domestic market channelled through rough terrain. Q3 corporate earnings projections remain modest, which is not helping investor sentiments.

“However, a glimmer of hope emerged as the initial set of results from the IT sector showed promise,” said experts.

Looking ahead, the upcoming Union Budget on February 1 is expected to drive market volatility.

Key sectors like capital goods, defence and electronics may receive policy boosts, while potential incentives in infrastructure and production-linked incentives (PLI) schemes could shape the next leg of market direction. However, elevated global bond yields and muted earnings outlooks remain near-term challenges.

Corporate earnings will be in the spotlight, with major companies, including IT giants, releasing their Q3 results.

Macroeconomic data, such as India's inflation rate and industrial production figures, will also play a crucial role in shaping market direction. On the global front, updates on the US economy, particularly labour market data and inflation trends, may impact FII flows.

“Amid this volatile landscape, staying disciplined and focusing on high-quality, adaptable businesses is essential. History shows that periods of market weakness often provide opportunities for long-term wealth creation, provided investors remain patient and avoid chasing speculative trends,” said Appala.