Statues of people and a bull are seen next to the logo of the National Stock Exchange (NSE) in Mumbai, India, September 6, 2024. REUTERS
Oct 10 (Reuters) – India’s equity benchmarks rose on Friday, driven by heavyweight financials, although the gains were capped by a slide in top IT firm Tata Consultancy Services on profit taking and its plan to invest in an AI data centre.
The Nifty 50 rose 0.32% to 25,260.1 while the BSE Sensex added 0.33% to 82,433.34 as of 9:55 a.m. IST.
The Nifty 50 has risen in five of the past six sessions, gaining 2.3%, led by a rally of about 6% in IT stocks.
On the day, fourteen of the 16 major sectors gained, with financials and banks rising about 0.6% each.
Tata Consultancy Services fell 1%, after gaining about 6% in the previous six sessions before it reported its quarterly results post-market hours on Thursday.
While the company reported a revenue beat aided by strength in its banking, financial services and insurance segment (BFSI), multiple analysts flagged concerns over its plan to set up a 1 GigaWatt datacentre.
AI data centre investment decision has overshadowed core business, said Girish Pai and Lopa Notaria, analysts at BOB Capital Markets, terming it a “negative surprise.”
“This move is going to be significantly return-dilutive and lower free cash flow available for distribution to shareholders in the next five to seven years.”
Metal index which jumped 2.2% in the previous session tracking a surge in base metal prices, dropped 1.1% on the day.
The broader small-caps and mid-caps gained 0.7% and 0.4%, respectively.
“The broader market sentiment remains upbeat on optimism around demand recovery and expectations of steady quarterly earnings,” said Vikram Kasat, head of advisory at PL Capital
Among stocks, auto parts maker Sona BLW jumped 4.3% after signing a deal with Germany-based NEURA Robotics for joint development of robots and humanoids in domestic and international markets.
Tata Elxsi lost 2.1% after reporting a drop in profit for a fourth straight quarter, dragged by softness in its transportation business.
Reporting by Bharath Rajeswaran in Bengaluru; Editing by Sumana Nandy and Sonia Cheema
